CHARLOTTE -- Electronic bill payment by consumers using computer or telephone-based services is on the rise. But 70 percent of these so-called electronic payments end up as paper checks and are processed manually. Ironically, for most companies receiving such payments, the result is significantly higher collection costs.
First Union Corporation is introducing a new electronic bill payment collection service for corporate customers that helps bridge the technology gap. This new service offered by the company's Cash Management Division is truly electronic. By using the service, companies will no longer have to rely on a bill payment vendor to mail a paper check with a list of customers who paid their bills via PC or telephone. The result is faster, more accurate bill payments at a lower cost -- with no manual processing.
Effective April 14, First Union also introduced a related service, Quickbill, for companies wanting to offer their customers the option of paying their bills by telephone. An automated voice response unit guides the caller through the entire payment process, even providing the current amount due. The consumer maintains control over the payment date and amount. All payments are posted electronically, significantly reducing the cost to the company. Electronic Bill Payment? But Is It Really? First Union's New Bill Payment Collection Service is truly electronic
"As electronic bill payment grows in popularity, we want to bridge the gap in technology to make the process beneficial for the company receiving payment, as well as the consumer," said Charles Sherrill, product manager for electronic bill payment collection. "The key is to make it simple and convenient for the consumer to use, and cost efficient for the biller. With our new payment collection service and Quickbill, we can do both."
First Union's new bill payment collection services are designed for companies that have large collection volumes, such as utility, telephone/long distance, insurance, cable and finance companies. Today, only 1 percent of payments are made electronically. Sherrill said that number is projected to increase dramatically by 2000.
First Union will help link corporate customers with any third-party service provider, such as VISA ePay or Checkfree, that consumers use for bill payment so paper checks are never needed. Through its link with multiple service providers, First Union will collect consumer payments and deliver an aggregate sum electronically to the payee.
In addition to these bill payment collection options offered by First Union's Cash Management Division to corporate customers, First Union also offers bill payment services directly to consumers. First Union customers can pay their bills using Quicken, Microsoft Money, or by using one of two proprietary First Union services -- Telephone BillPay and Cyberbanking on the Internet.
First Union's Cash Management Division offers a wide range of services designed to improve the day-to-day efficiency of a company's treasury operation and maximize its return on cash assets. These include a variety of Automated Clearing House, PC-based and electronic commerce options. First Union also offers an array of collection, disbursement, information reporting and electronic funds transfer services. (See First Union's Cash Management site on the Web at http://www.firstunion.com.
Charlotte-based First Union Corporation is the nation's sixth-largest bank, with assets of $137 billion at March 31, 1997. First Union serves more than 12 million retail and commercial customers and has offices throughout the East Coast from Florida to Connecticut.
