Is it "Safe" to View and Pay Bills online?

As Internet technology now allows bills or invoices to be presented electronically and then paid at the presenting web site (whether this is a bank’s site, merchant site or third-party site) in this brief article we investigate whether this carries any significant risk from a payee/consumer or merchant perspective.

 

Perhaps the very first test of  potential “riskiness” when using any electronic presentment and payment (or EBPP for short) web site is whether it is secure. The vast majority of web page addresses, also known as URLs, typically begin with "http." However, to pay bills online, the web page should always start with "https," which signifies a secure socket layer or SSL connection (or one in which data is fully encrypted).  This typically means that you can see a padlock icon, usually in the top or bottom corner of the browser window (or in some cases it may even turn the URL address background green or light blue). Clicking the padlock icon will often reveal the site's security certificate (and allow you to read about the particular protection that this affords).

 

Now that a consumer knows that he or she is on a secure site, the next step is to ensure that the login process is secure. A good site will usually give a consumer two options-to pay instantly or as a guest, and to register on the site to use it again and save time on the next occasion the consumer uses it. As a guest, a web site will typically only ask for an email address and then ask a consumer how he or she would like to pay from the options they make available. This may mean entering debit or credit card details for example, which should then give a consumer the option to confirm the transaction (and then as a further security step run the transaction through 3D secure-a process used by major credit card companies as an added XML layer for online credit and debit card transactions. Visa call this process “Verified by Visa”, MasterCard call it “MasterCard SecureCode”, JCB International call it “J/Secure” and American Express call this “SafeKey”. Overall then, a well-constructed site will offer a safe payment system for consumers (and there are card and bank protections on fraud and low limitations on consumer liability in any case). Even so, consumers should also look for extra safety in specific statements on any given EBPP site about PCI compliance (or payment card industry standard adherence) and/or that credit/debit card data or numbers will not be stored or saved in any way (and if they are, that they will be fully encrypted and tokenised as a further protection against theft or fraud).

 

When registering (either before or after a bill had been viewed and paid) a well-designed and safe web sites will ask a consumer to set up a user name and password that he or she can remember and that identifies the consumer every time he or she uses the site in the future. The site may also ask for additional data such as email address, physical address, date of birth, driving license number or even passport number. In some cases, they may go yet further and ask security questions to help validate a consumer’s identity in the case of a future forgotten login ID or password. Although these may seem personal and even intrusive, these steps are all designed to protect consumer security and ensure that only one person is able to see the bills posted and to effect payment of any kind. In other words, this process allows the web site operator (financial institution or merchant) to know the customer (a process they call KYC) and protect everyone’s security to the best of their ability.                

 

In general, research suggests that consumers worry most about using credit and debit cards on online sites of any kind. However, in the world of bill payment (as opposed to online shopping for example)  these risks are not as great. Even a person with a stolen credit card number is highly unlikely to pay a bill for another person (assuming he or she had the bill details to enter) and even if they did, the risk would be with the merchant and not the consumer. So what about merchant side risk?

 

For a merchant, the greatest risk is charge-backs. This is where the credit or debit card holder disputes the transaction anywhere up to 6 months after the transaction date.  Charge backs can either be because the card holder disputes that they made the transaction at all (i.e. it was a stolen or fraudulent), or because they did receive anything in return for the payment that was made. The second reason for chargebacks in the bill pay space is very rare, but the first reason-theft or fraud is obviously quite common (with total estimated costs of just under £1 billion in the UK in 2010). This is why online bill-pay web sites need to take so much care to ensure that card holders (who are not present as they are in a retail transaction) are who they say they are.

 Summary

In the final analysis, for those EBPP sites that have a clear secure socket payment layer (SSL), have clear statements about security of information and sound compliance and a well-structured registration process, consumers face very low levels of risk (with a very low liability even when a rare problem may arise in any case). The merchant however, faces potentially much more risk arising from both debit and credit card fraud (and therefore possible charge-backs), but risk this can be mitigated with good consumer checking processes that are made easy for every customer to the site to use.

Moving Customers from the Paper-based World of Bills and Checks into the Digital age?

To encourage customer to adopt an online billing solution of any kind takes careful planning and creativity and there are several “angles” a biller can take in the general promotion of the benefits of the change to e-billing. A few of these are:

1.          The Informational Angle – simply communicating that the new system is available and is easy and quick to use and should be tried –the more you can get the pioneer and early adopter types to make the switch the better-some of these may even provide testimonials to be published on a web site to the rest of the customer base.

2.          The Green Angle – The fact that the new bill presentment and payment system can save paper (and even save water, electricity and fuel) is a powerful reason for many customers to “do their bit” and make own small contribution to the sustainability of the planet.

3.          The Benefits Angle – In the early stages, customers will not be interested long communications about features of a new system (and may even resist any proposed change). However, by focusing on the specific benefits of the new system (such as speed and convenience, or the capacity to save them time and money in an increasingly busy world) this is often more than enough to get them thinking about making the change.

4.          The Rewards Angle – Merchants can offer specific rewards and incentives (points, gifts and prizes etc.) to customers to get them to switch to an electronic billing and payment solution.   

In some cases, a merchant will want to adopt just one of these angles to get customers to start thinking about using an online bill view and payment solution, but it may also be useful to adopt more than one angle or even switch from one to another progressively over time and therefore use all four of the above options. Of course, for the bulk of customers you may need to use the rewards angle (and actively or even aggressively) to get them to take action.

Educating Customers to Adopt an Online billing System

Whenever a merchant introduces a new online billing system, however basic it may be, it is extremely important to educate customers in how to use it. Failure to do this will mean slow take up or even refusal by many ever to use the system.  

 

In the initial stages a merchant should ideally start to educate customers about the new electronic payment channel they have to offer and its specific features and benefits (which help customers to feel more comfortable to try it out) in general terms. The best way to therefore inform customers of a change such as this is to use every available communication channel and to do so frequently. For example, it may be a good idea to think about using some or even all of the following possible channels:

•      Evolving several leaflet(s)/pamphlet(s)/brochure(s)/booklet(s) on what the new electronic payment channel is and how to use it

 

•      Writing a letter to all customers about the new channel and how it is best used

•      Sending one or a series of informational emails about the new service and its various features

•      Designing your on-hold messaging to include information on your new payment service

•      Putting special new payment channel/system FAQs on the main web site

•      Putting a small advert and even brief explanatory information on the physical bill that is sent out to all customers

•      Putting a Quick Response or QR code on all printed bills to allow customers to go straight to your new electronic presentment and payment channel (even from a mobile device).

Another important part of the ongoing education process is to ensure that internal support staff are well-briefed about the new online bill presentment and payment system and can help customers with their questions and early attempts to use the system. This is particularly important when customers raise billing queries or when they wish to make payments over the phone (and can be shown immediately what to do to make the same payment online each month quickly and easily, and even set it up as a recurrent payment if the individual wishes).

 

Customer education is often a forgotten part of introducing a new online billing system but with a little planning and effort it can make take-up considerably quicker and less painful for all concerned.

Implementing an Online Billing Solution

As banks and the rest of the financial services industry continues to evolve online systems and more and more individuals are comfortable using the web, as well as in using their smart phones and tablets to make a payment, all businesses have a tremendous opportunity to speed up their receivables process while lowering costs and improving efficiencies. This is best achieved by making as much of the electronic or digital technology that is readily available to us as possible (although we will need to determine exactly what this means of course).

There is no one-size-fit-all online billing system for every organization, as there will be many individual factors to be taken into account in every case. However, there are some common issues that need to be considered and it is these that we will look at in his brief article. In other words, having assembled a payments strategy and calculated the true cost of billing and collections, the next key question is therefore “what is the best way to go about implementing a more digitized approach to billing and payment for our customers?”

What are the Options?

There are several choices available to a merchant to start to issue bills electronically and to accept payments via the web. These include:
Migrating to an email and attachment based approach

• Adding a third-party payment system
• Building an online billing and payment solution (writing the software),
• Buying a third-party piece of software for online billing and payment,
• Outsourcing some or all of the billing and payment process to go more online
• Using a cloud-based pay-as-you-go online service (such as BillSwyft for example).

All of the above are viable options and the best is likely to be the last of these in cost-saving terms. However, each organization needs to make its own choice in terms of what it is ready to do.

 

Important Transition Considerations?
Whatever online option is finally selected in terms of how to render change to current billing and payment practices, there are several other issues or considerations for a merchant of any size or type to think about. These include:

Size and Type of the Enterprise

Although almost all organizations issue invoices or bills to some degree, some products or services are supplied only after payment is taken at the point of sale. Most retail businesses are a good example of this. However, where customers are allowed to pay for goods and services after they have been supplied or rendered, an invoice needs to be issued promptly and efficiently and ideally options for payment should be many and easy to use. Having said this some invoice volumes are so small that the work involved to send them and collect payment is easily absorbed in one person’s job role. In these circumstances large internally built or third-party software solutions are unlikely to be economic.

Branding/Marketing Issues

Any business will need to decide how much marketing control they want to have over the look and feel of both the bill and the payment page or pages. In some companies, this may not matter very much and a generic payment site may be fit for purpose. However, if a brand is important or even if a company wants to maintain a very similar look and feel (including use of logos etc.) then an internally built, purchased software solution or full digital service such as BillSwyft is likely to give a merchant the most customization potential. 

Website Monitoring and Availability

A critical component to any company’s desire to adopt a more digital billing and payment approach is ensuring that site availability to customers is high. A couple of typical metrics to include are therefore response time and website availability or uptime. Clearly an internally built system or purchased piece of software will need to be well-built and well-supported to be available as needed. 

Customer Service

Many considerations need to be fleshed out when deciding on what type of customer service is needed for a given merchant’s customers. For example, is the system going to be user-friendly to all people who may be interested in using it? do you need 24/7, 365 days a year availability? Do you require international payments? or can your system quickly find a payment transaction when needed (and can it communicate easily with the customer –via online means, when necessary)? 

PCI-Compliance and other Risk issues

As with accepting credit or debit card payments in person (or via a phone call), any merchant accepting cards as a payment type must ensure that they are in compliance with the Payment Card Industry (PCI) Security Standards Council’s rules. The PCI Security Standards Council offers comprehensive standards and supporting materials to enhance payment card data security. The PCI Data Security Standard includes requirements for security management, policies, procedures, network architecture, software design and other critical protective measures, such as card tokenization and encryption.  All of these factors need time and money to manage properly if building an internal solution but are often already party of any third-party site.

Costs/Fees

One other important issue to think about when accepting payments via the web is costs or fees. Many businesses which operate on low margins could see those margins deteriorate even more as credit or debit card fees (direct and indirect) would add an additional (and perhaps unnecessary) layer of cost. Although fees are payable to process payments with an internally developed or software-based solution, third-party providers can also charge a courtesy or convenience fee. All fees therefore need to be carefully scrutinized ahead of time so that there are no surprises when a monthly transactional statement is sent.

Different ways to pay online

Receiving Electronic payments incurs extra costs. When you pay for a good or service in a shop using a credit or debit card the retailer must pay a commission to the financial institution processing the card details; additionally there will be operating costs for the system used to process the cards. This is the same for non-retail merchants who accept credit or debit cards to pay for their products and services.

These systems are often costly, challenging to implement and sometimes technically difficult to understand. These hurdles represent a ‘barrier to entry’, which, if overcome, can give a merchant the competitive edge. 

Electronic business is real and continues to grow as a medium with over 35% of UK adults in 2012 having used the Internet to order tickets, goods or services.

There are several approaches to taking Electronic payments. These are:

•Traditional Card Payments
•Mail-order
•Online Payments
•Acquiring Banks
•Payment bureaus
•Secure order forms
•BACs
•Alternative payment options
•No payment option

Let’s look at each of these:

Accepting credit card payments

Many businesses can take offline Electronic payments through their credit and debit card facilities. All banks can process these transactions and some will also process Internet based transactions.

To take offline Electronic payments you usually need to apply for the appropriate facility from your bank or other payment processor or provider.

Here are some key electronic payment terms to consider:

•Merchant service: this is the generic term for the service provided by banks that allow you to ‘swipe’ credit and debit cards at your place of business.

•PDQ machine: this generic term for the machine that is used to ‘swipe’ a credit or debit card.

•Acquiring bank: once you have ‘swiped’ the card, the customer’s details are passed to an acquiring bank for processing. The acquiring bank checks the details of the card and authorizes the transaction. The acquiring bank is the bank that provides your merchant service.

Ten steps to setting up offline electronic payment:

1.Apply to a bank for a merchant service.

2.Negotiate the costs.
3.On acceptance, pay the set-up costs.
4.Receive and install a PDQ machine.
5.‘Swipe’ the customer’s card to collect their credit or debit card details.
6.Wait while the card details are passed to the acquiring bank for approval.
7.Ask the customer to sign the sales voucher.
8.Verify the signature and process the payment.
9.A transaction charge is automatically paid to the bank.
10.The customer leaves with the goods or service.

For electronic payment in a shop, the customer is present to sign the sales voucher. If the transaction takes place via the phone or the Internet, the customer is not present so there is an increased fraud risk.

Any merchant service (whether offline or online) is provided at the discretion of the financial institution concerned. There are few set rules as to which businesses can and cannot be approved for a merchant service. Be prepared to negotiate the product at a price that suits your needs. There is information in the Costs and Considerations section to help you with this.

Payments by phone, post or fax

Mail order payments involve more risks for banks and financial institutions than transactions where the customer is present at the point of sale. Consequently, acquiring banks usually ask for more commission per transaction (perhaps 3.1% instead of 2.79%) and a more detailed agreement on the fraud checks you use.

With proper planning, your mail order operation should be able to get a customer not present merchant service from your bank without difficulty. If you already have an offline service negotiate with your bank to avoid paying another set up charge.

The bank will approve each application individually but there are other equally valid options available if you cannot get a merchant service.

Taking online payments

All the electronic payment methods we have examined use an Acquiring Bank and Merchant Service to process the transactions. To take online Electronic payments you need to get a specific Internet Merchant Service and also a Payment Service Provider to collect the card details over the Internet. Let’s review these elements.

An acquiring bank: is a high street bank that offers credit and debit card processing services. They acquire the money from the customer, process the transaction and credit your account. You need to apply for a merchant service if you want a bank to handle your Electronic payments (other options are explored later).

Merchant Services fall into three categories:

1.Standard Merchant Service for use in shops when the customer is present;

2.Mail-order Merchant Service for customer not present transactions when the customer orders remotely by phone or post / fax;
3.Internet Merchant Service for transactions generated over the World Wide Web.

Obtaining an Internet Merchant Service from an Acquiring Bank is quicker and easier if you already have “offline” card processing facilities set up with the bank. In this case, just ask your bank for an additional Internet Merchant Service ID for use exclusively with Internet transactions. This process is normally quick, especially if the risk to your business does not change.

If you have no prior card processing the bank will carry out a thorough credit check (lasting anything up to 8 weeks). The delay can make it worthwhile using a Payment Bureau that can be upgraded when the Acquiring Bank application is ready – or when you feel your Internet turnover justifies the slightly higher fixed costs of an Acquiring Bank. Alternatively you could look at Post Paid Account services, some of which remove the need for an Internet Merchant Service ID.

When you obtain multiple merchant numbers for both online and offline, you may need to pay separate set up fees and rent a PDQ swipe machine for customer present transactions. The acquiring bank could charge around £25 per month for this rental. If you are getting a combination of these services negotiate the costs with your provider as they may only charge one set-up fee.

A Payment Service Provider (PSP): is a “virtual” PDQ swipe card machine that collects the card details over the Internet and passes them to the acquiring bank. To take Electronic payments over the web, you will need a PSP at a small cost. Some acquiring banks offer PSPservices as part of their product and there are other less expensive options available.

Your choice of PSP will depend on its cost and compatibility with your chosen e-commerce software solution. A fixed monthly fee starts around £10, but there are some cheaper option available starting as low as £0.05 per transaction. Usually, the higher your transaction volume the cheaper the rate you will be charged.

Acquiring Banks

As previously mentioned, the Acquiring banks are an essential element of taking Electronic payments. If you wish to take card payments directly you will need to apply for a Merchant Service with an Acquiring Bank.

The Electronic payments tool does not advise you directly about which acquiring banks to use as this is a decision that is determined more by your current banking arrangements than individual price or service differences between providers. Acquiring services tend to be offered by the UK banks as an additional service that runs alongside a suite of other services offered by the bank concerned. The banks look on the merchant acquiring service that they sell as one revenue stream of many.

For instance, a low rate for taking card payments may reflect that your bank is generating revenues from you in other respects – a loan interest would be an example. Rates for card processing are for this reason, highly variable and should be considered alongside all your other banking charges. Furthermore, because of complex rules governing the way acquiring banks assess risk (of allowing different businesses to take cards) it is difficult for the online payments tool to model or predict exactly what the costs might be.

Please click the following link to register for the free to use Electronic payments comparison tool. As the tool can’t be used to predict your exact acquiring costs, we have used a set of assumed values that you can change after you have spoken to your business bank about its likely rates. The typical rates we have used, produced in conjunction with the banking industry are:

Typical Rates

Setup Fee: £200
Monthly fee: £10 
Debit: £0.35 per transaction
Amex: 3.0-4.0%
Diners: 3.0%
MasterCard & Visa: 2.5%
Bond: £1000

You may also find that the following list of Acquiring banks useful in progressing your enquiries, either with your own business bank or with a new provider if your bank cannot satisfy a particular need:

UK providers

•Allied Irish Bank Mechant Services
•Alliance & Leicester
•American Express Merchant Services
•Bank of Scotland
•Barclaycard Merchant Services
•DinersClub
•HSBCi /Global Payments
•Lloyds TSB cardnet
•Royal Bank of Scotland & NatWest Bank
•Ulster Bank

Overseas providers

•euroConex – Euro zone transactions
•Paymentech – US and Canadian transactions

Specific card type resources
•STYLE
•Discover
•Maestro
•Switch
•Visa EU
•MasterCard

A Payment Bureau

A Payment Bureau like Worldpay or Netbanx is a one-stop solution collecting and processing the card details on behalf of the business without requiring an Internet Merchant Service with an Acquiring Bank or a separate PSP to be set up. Their simple application process makes bureau services a popular choice for online payments and an ideal solution for a SMEs first step into e-commerce.

A bureau collects funds via credit or debit cards using ITS OWN acquiring service. The bureau collects money for multiple retailers (tens of thousands of retailers for a large bureau service) to achieve the trading volumes necessary to make the service profitable. The bureaus in the UK will generally accept most types of business with a business bank account and an address that confirms the identity of the business.

A bureau reduces the risk of accepting almost any type of business through one principle mechanism - the bureau holds the collected funds for 30 -60 days (settlement period) in the initial period of accepting a business. There is a cost to this in terms of cash flow to your business and possibly interest charges. You can accurately model these costs using the free online payments comparison tool. as factors such as settlement period and overdraft interest are included in the cost calculations.

As most fraud and refunds occur within the first 30 days after a transaction, this is a very effective means of reducing the exposure of the acquiring service that the bureau uses. In so doing the costs of charge-back recovery are minimized as the bureau can simply refund before the retailer banks the money. Additionally, the bureaus normally charge more for card payments, at least 4% for credit cards and 50pence per transaction for debit cards.

Advantages

•These services will accept most types of business
•Trading record or length of trading will not usually be an issue
•Fast turnaround for applications - a few working days compared to weeks - for a new merchant acquiring applications

Disadvantages

•Merchants’ funds are held for 30 - 60 days
•Transaction charges are higher( 4-8% )

Doing business over the Internet can be daunting but if you enable customers to pay for products online, you can generate actual revenues and make a return on the time and money you have spent developing your website. A bureau service is the simplest way to begin taking payments online.

You can also get the same service from a Post Paid Account provider as they use trusted third parties to bring all elements of the service under one roof. This usually includes all elements of payment management from billing the customer to chasing any late payments.

Secure on-line transactions

An order form is a simple page on your site that the customer fills in with details of themselves and the goods they want to buy. There is no automation and the fields in the forms are sent to you as an e-mail and do not use a PSP.

As a very basic method of taking orders through your online catalogue this can be very manual and labour intensive. An automatic ‘buy product’ button can take the user to the order form page where product details are already filled in but customers who want to buy separate products need new forms for each one and it soon becomes clear that a simple shopping cart product is more effective.

A simple form is NOT a secure way of collecting card details. To be secure you, the Merchant, must use a secure order form, which uses a secure server to email the customer’s credit card information.

Like the code machines used in World War Two, a secure server encrypts the message making it hard for criminals to decipher (and steal) credit card information.

An offline PDQ swipe machine, available for a small cost, will enable you to process the credit card details when you receive them.

 A slightly more advanced option is available by using a shopping cart software product as most carts have the ability to either store credit card numbers securely so you can view them over the Internet or send them securely over e-mail. By making use of an existing merchant account, payments can be processed by using a PDQ swipe card machine or by old-fashioned credit card slip.

Advantages:

•Secure forms require a minimal outlay
•Avoid paying for a Payment Service Provider facility.
•Avoid an extra internet merchant number for online transactions
•Merchants can manually screen orders as they come in and reject risky transactions
•Site superficially appears to be fully credit/debit card enabled

Disadvantages:

•Secure forms have limited use for more than one product on your site.
•Some bank acquiring services disapprove of merchants using an offline merchant number for Internet transactions so the merchant may be in breach of their acquiring bank’s terms and conditions.
•There is no “live” authorization of card details so incorrect details will still appear to have been accepted. Contact (by telephone) may then be necessary.
•Transactions are processed manually - time consuming.

BACS

This payment method is ideally suited to business-to -business (b2b) transactions with regular or repeat customers. It is already used to pay over 70 per cent of salaries of the UK workforce. BACS payments are usually processed as batches using dedicated software linked in with the banks system. Currently these payments can be facilitated directly through a business bank via a “file” of transactions or via dedicated software that links to the bank account making the payment.

The advantages of BACS

1.Regular automated payments

2.Reduces time and cost of administering bulk payments
3.Helps manage cash flow and improve financial control
4.Reduces risk of loss, late payment and theft for customers

At the enterprise level, BACS can be integrated with an e-commerce b2b purchasing system to allow automated settlement of accounts between organizations.

Benefits:

As the BACS process is electronic, it removes the need to write cheques, which can be a costly process, subject to human error. Payments can be made much later in a business day, up to 9pm and are cleared within two business days to any bank account. The payment method is suitable for customers who are making more than 150 monthly payments.

Other Alternatives

There are other ways of taking payments online which can allow payments from customers without credit cards. You can directly compare some of these alternative payment methods by clicking here to register to use the e-payment comparison tool.

These payment services can stand alone in certain cases but mostly exist alongside a mature PSP/Acquiring solution to give customers extra choice. Although less well established, they can offer substantial benefits to the customer. They may be worth considering if the other bureaus or PSP are not an option - risk is assessed differently by these services due to their added security or reduced susceptibility to credit card fraud.

Person-to-Person - consumers set up an account using their bank account details and the person-to-person solution will then allow eligible merchants to debit this account directly when you make a purchase. This form of payment is common on auction sites but can be used as a general entry-level payment solution. more detail...

Mobile Commerce - allows a sale that has been conducted over the internet to be confirmed by sending an SMS to the customers mobile phone. The customer will normally need to set-up an account to do this but once they receive the SMS they can then accept or decline the sale that will (on acceptance) be charged to their bank account or mobile phone bill. There is also a growing market in ‘drop-charges’ to mobile phones where the call cost is charged at a premium to recover transaction costs. more detail...

Pre-paid Cash Card - These cards can be ‘charged’ by the consumer using cash, credit / debit cards or direct debit from a bank account and then used at participating websites and high street stores. Commonly used when an e-cash environment is required for children without credit-cards but also useful for small transaction amounts (even down to a few pence) where the minimum credit card transaction charges would disproportionately affect the profit in the sale.

Micro-billing - Many micro-billing type payment solutions offer a premium telephone number billing service that is essentially pay per view internet content hosted in a private area of the web. Customers pay for this content via their Internet Service Provider (ISP) or their phone bill. Charges are typically high for this service and it is really only suitable for niche content areas.

 
No Payment Option
If you have no online payment mechanism, the customers manually contacts the merchant by phone or mail and refers to the online catalogue to place the order. Although less expensive, this method lacks efficiency, especially if customers want to order multiple products.

The expectations of online shoppers have grown in past years and a flawed system may deter customers from putting their trust in your product. They may feel the system lacks security and may be reluctant to proceed with their purchase.

A phone number for the customer to call is better than nothing, but are you missing sales by failing to offer an electronic payment system to your customers?

You may be surprised to know that you can engage with several online and electronic payment systems for very low or zero fixed costs. These providers charge you a fixed or percentage cost of every transaction with no monthly, annual or set-up fees. You can compare these providers with the providers that charge fees by registering to use the free online payments comparison tool. Please remember that even if a provider charges you no fixed fee, you may still wish to pay an e-commerce agency or web designer to implement the payment solution on your website.

Will Mobile Phones Become the Dominant Channel for Bill Delivery?

There are now a multitude of channels available to customers to pay their bills. These channels include:

1. Print and mail (paper-based)
2. Fax
3. Email with embedded data
4. Data interchange (system-to-system)
5. Email with PDF and/or link to on-line
6. Customer Web Portal
7. Mobile (MMS; HTML; WAP; USSD)
8. Mobile via App
9. Mobile Tablet
10. Emergent technology (via cable TV etc)

Only print and mail on the above list existed as an option until around 30 years ago when fax arrived and 25 years ago when email came along (both of which still have quite a strong following today). Data interchange options were mainly evolved and used in the B2B rather than direct Business to customer or B2C space but again are still around today as a strong channel, supported in the main by large international software companies, who have sufficiently large installed volumes to want to protect their position in the billing market.

Web based technology has driven the greatest change in the billing space in the last 10 years or so and seen the emergence of both consumer and merchant portals (for presentment and payment) and the use of mobile technology as 3G and 4G have made the internet available to mobile phones.

Even though each of these channels presents a new and perhaps better and more convenient choice to a given customer (and are often presented as the channel to replace earlier channel choices) in reality, they are often just additional options. In other words, consumers have shown time and time again that they like the extra choice but do not necessarily want to be driven too quickly to only one channel (however “efficient and effective” it is presented to be).

The implication of customers wanting lots of channel choice to both view and pay their bills is that the same bill may need to be presented and rendered possible to pay in several channels, at least for now.

 
Today’s challenges
Some technology experts are starting to say that customers will be move rapidly away from e-billing to m-billing (m for mobile of course) in the next few years. Modern mobiles can certainly handle very complex tasks today - just look at the hundred of thousands of Apps available for all different platforms. These Apps can do complex tasks, even generating bills “on-the-fly”. A mobile can also handle a simple task such as bill presentment with ease today – in some cases on quite a detailed basis (even though reading it may present quite a challenge!). However, viewing a PDF bill attachment on a mobile (as opposed to a tablet) is often a long scrolling exercise, making it impractical in most cases. There is a solution to this but it needs the biller to solve the problem of displaying their bills in more flexible ways according to the kind of mobile platform to which it is being delivered. In this way, a customer can see a simple version of the way and then “drill into the detail” as they wish when they want to see itemization. 

However, perhaps all of this is a false dilemma. In the final analysis, customers do not care if a bill is delivered to their computer, their tablet or their mobile (or even all three). In fact, many want to see it delivered in as many ways as possible to allow maximum flexibility, including by email or by PDF attachment and even in the physical mail or fax on some occasions. This multi-channel approach is therefore a customer centric approach. The challenge for billers then is how to provide as many of these channels as possible at the lowest cost possible. In the end there is only one solution to this –use a full digital bill presentment and payment portal, such as PaySwyft for example. This not only means that a bill can be sent in all 9 of the current channels above (and can be paid at the same portal) but means that a biller would be well-placed to take advantage of the new emergent technologies that will come along as in the near future.

Finding and Using the Right Invoice Template

If you type “free invoice template” into the Google search engine you get about 40 million returned results. Clearly then there is a lot of interest in trying to find and use an effective invoice process (and ideally a cheap or free one) so in this article we will explore what is available and what options appear to deliver the greatest benefits.

Whether you are a one person business or a giant multi-national, getting an invoice to a customer is the beginning a long process in getting paid. Hence, it is important to get this invoice to a customer quickly (once a product has been supplied or service rendered) but it is equally critical that it is clear and encourages the earliest possible payment.

Fifty years ago, hand-written or simply typed invoices sent through the mail were the norm. Today, we have many other options (although these old-fashioned practices have far from disappeared completely). Perhaps the simplest of these is to use an pre-designed template and popular desk top applications like word for windows and an excel spreadsheet package both have several design alternatives to choose from. In both cases these provide a well-designed looking invoices and provide prompt space for particular customer names, address details, product or services provided and the cost involved. They even allow space for logos to be added if desired. 

Outside the standard templates of desktop applications, there are many relatively cheap and even free software packages which allow invoices to be generated. These work in similar ways to desktop templates but may also generate sequential numbers and allow better storage and retrieval (and avoid the mistake prone process of overtyping the last invoice that was typed).

In both of the above alternatives, the problem is that despite the fact that the invoice can be sent by email as an attachment is still only received as a piece of paper (which the customer can do little with when they receive it and may only print in order to later pay in any case).  As a result, perhaps the best alternative of all is to use a bill presentment service which renders the invoice as a full digital bill. This allows individuals to click on an electronic bill at a web site (ideally rendered in graphical form as they would expect to see it as it appears when posted) and either reveal more bill detail, store it, end it on to someone else to review and most importantly to pay it.

For example, at the PaySwyft web site (www.payswyft.com) sole traders, partnership and companies or all sizes can click on the “free invoice template link” on the home page and use the system to generate an invoice at no cost whatsoever. Like the options described above it provides an clear and clean process for entering invoice details but this is rendered as a full digital bill, meaning that it can be clicked on dynamically to see as much detail as has been entered and perhaps more importantly, it can be paid from within the browser, also electronically. The added bonus here is that the single invoice can then be used (when saved) as a template to generate future invoices much more quickly (because a logo has been added and the design of the overall invoice is relatively set).

Security Protection is the Online Billing World

The use of online billing continues to grow but with this growth comes security risks which need to be managed, especially as far as the consumer is concerned. There are a number of useful steps or measures that can be taken by an individual customer who uses online banking or an online bill presentment portal. A few of these measures include the following:
 
1. Use a strong password- Too many people use their birthday or address for passwords that can be readily discovered. It is therefore better to come up withy something unique. A strong password is at least 7 characters long and contains both upper and lowercase letters. It is also helpful to include a number in the string of possible. This reduces the ability of anyone else guessing a consumer’s chosen password and thereby effect any illegal transactions.
 
2. Keep login data hidden away- Account information, such as a login or password or anything else that will help a person trying to commit fraud, should be kept in a very safe place. This is not on a “post it”, note or scrap of paper on your desk, where others may see it, but in a locked draw or a diary that you carry with you at all times. Even in the latter case, you may want to record the data in a way that you understand it but will confuse a third party person.  

3. Review transaction history- Just as we should check our bank account pages for errors and oversights, so we should apply the same level of scrutiny to our online transactions. This should include not only the most recent transactions but also the history to make sure that a fraudulent transaction is not “buried” in the list. Most fraudsters like to steal quietly and invisibly (one line item that is similar in value) so you need to take extra care to spot that purchase you never made or bill you never got.

 
4. Protect your computer- However careful you may be in your online effort to take security seriously you need to keep your hardware secure through the use of up-to-date antivirus software and firewalls to bar intruders from accessing your network or computer. The greatest risk here is file attachments sent to you on email. Always therefore make sure that any files from people you do not know (that make it past your firewall and spam catcher) are deleted (and attachments from them are never opened).
 
5. Sign out- when operating any online accounts, it is highly advisable that when your online session is complete, you sign out immediately and close the browser window you are done, as double security. If you do need to leave your desk in an office unattended for a few minutes, also make sure that you have locked your computer or password protected it so that others cannot log in to an open session.
 
6. Avoid public computers- Although it is often convenient to be able to log in remotely to your account (and this can certainly be done from your own smart phone or tablet computer for example) you should ideally avoid signing into your online billing portal on a public computer like the ones at cyber cafés. This is simply because they may not have good security and may have software on computers which record your login and password information for later use by someone wanting to commit fraud.
 
7. Beware of Email scams- Many fraudsters try to steal the identity of a bank or other financial services institute and send emails requesting personal and confidential information to be provided. Here it is best to simply avoid putting any login or password data into emails.
 
8. Select a trustworthy Portal- before using any online billing and payment system, be sure to check the credibility of the organization you are dealing with. Check that they are certified and check that they have secure socket layer (SSL) payment certificate etc. You can also read user reviews, blog postings and even “Google” the company to see what you can find that may give you any cause for concern.

If you follow these simple guidelines, you will protect your confidentiality and your account and enjoy the many benefits of using an online billing system.

Innovation in On-line Billing

Last month the Javelin E-commerce research company released its annual report on who they see to be the “innovators” in the on-line Billing space (at least as it relates to US experience). These are many of the companies that are not the Billers themselves (or merchants with the facility to render a bill directly at their own web site and to readily accept online payment at the same site) and the Banks and/or Credit Unions (or what Javelin calls FI’s) who offer an online BillPay service to their customers.

Let’s start with a few quotes from the report:
“A number of innovative companies are seeking to overhaul and streamline the chore of paying bills with services that potentially could steal market share from the dominant models of paying bills at Financial Institutions (FI)s or directly at biller sites. Success for the upstarts will not come easily or soon, however. These innovators not only are competing against one another in a crowded field with piecemeal offerings, their survival will depend on changing entrenched consumer habits for paying bills at FIs, at biller sites, and by mail.”

“Billpay innovators have the potential — at least on paper — to offer a package that combines or exceeds the strengths of FI bill pay and the biller‐direct model. Those strengths include the ability to view and pay all bills in one place, oversee all account balances in one place, pay from any account at any FI, and file away documents from all sources.”

“BillPay Innovators lack the necessary four-part combo: money management, bill‐pay capabilities, archives, and mobile access. To convince consumers that they are a compelling bill‐pay alternative, innovators must offer a package that combines the control of money management, the practicality of bill pay, access and control via mobile devices, and the convenience and security of electronic archives.”

In summary then, Javelin concludes that independent online billing companies may have a possibly disruptive influence in the future, but it’s not yet happened, it will take a long time, the impact will be small, consumer habits will be difficult to change, the new functionality that will be available is not that compelling and there is a lot of competition rendering the effort relatively unprofitable. In other words, this is not a very positive outlook. Unfortunately, this overall conclusion is based on faulty assumptions leading to spurious and incorrect forecasts and in this article we will briefly suggest why this is the case and take each of these four overall objections one by one.

1. The market penetration of a well-run cloud-based online billing business will take a long time and the impact will be small. The argument here is that Bank Bill Pay and “Biller direct” has already “locked up” much of the market and the small innovative online billing companies now have only the “crumbs from the rich guy’s table”. This assumes that both merchants and consumers are happy with these two currently available options. For a start only the largest billers typically have an online presentment and payment solution and even it may be slow and not easy to navigate (and creates a different user experience for the consumer for every merchant that has such a site). On the Bank/FI side, online bill payment is offered but presentment is either not available at all in most cases or is only at summary single line level (so the consumer can’t view a full digital bill). The consumer may also only be able to pay bills for large merchants and only from their checking account. Both of these parts of the market are therefore only “technology interludes”. They will be quickly swept away by a full and integrated digital portal-based technology and this is available from several of the innovators right now.

2. Consumer habits will be difficult to change It is true that consumer behavior is hard to change but it is not impossible. Look at the significant shift to internet banking in the last decade (which is what has mainly driven online bank bill pay in recent times). However, more significantly the pain is not essentially on the consumer side in the bill presentment and payment area-it is on the merchant side of the equation. Merchant pain here is considerable and long standing. Many merchants have been sending out paper-bills for decades and collecting payment by offline means (like cheque and cash) for as long. Even where they can take credit and debit cards they need to have a response team or call-centre, which is costly. But perhaps most significant (and this envelopes even those merchants that have switched to emailed invoices), the big merchant challenge is reconciliation, most of which is done manually and may require two, three or even four sets of data-keying. Online billing reduces this task to almost zero time and therefore on-going cost. And with a sophisticated cloud-based online billing and payment solution it also means no up-front capital cost and the avoidance of the months of time it may take to integrate with the local accounting software being used. This is a very big win for merchants and allows them to offer incentives to customers to switch to online payment or face extra costs if they do not. From a consumer perspective this not only quickly changes the thinking but if the online solution allows them to also get a bill on the phone as a text message, as an email or they can still print it if they wish, the resistance is likely to fast melt away.

3. New online bill presentment and payment functionality will not be very compelling Javelin are magnanimous enough to recognize that some of the innovators technology is “impressive” but then fail to draw the conclusion that it will be valuable. Once again, we have to look at the value to both consumers and to merchants themselves and when this is done, the benefits are substantial. There is insufficient space in a short article such as this to list the range of features offered by many individual innovators technology companies but if we look at Payswyft as one example, the consumer has the ability to see full bill detail instantly, 365 days of the year and 7 days a week, pay by almost any method (including cash remittance) can calendarise payments and set up automatic debits, can receive customized alerts, and track all bills (which they can progressive see from multiple merchants in one place under one login and password). And for the merchant, bills or invoices can be securely sent immediately they are ready in digital form (which cuts down delivery time and lost or undelivered problems), increased payment options are offered to consumers and accelerated cash-flow is created (as consumers on average pay earlier with an online transaction). This is not to mention the call-centre and reconciliation cost savings mentioned above. Even these few features are worth huge amounts of time and money for consumers and merchants and are therefore anything but trivial.

4. There is too much competition amongst these small innovators making substantial profit making unlikely Much of the payments industry see so-called “innovators” as either non-bank businesses trying to get into the payment space (like accounting software companies) or businesses that are supplying online billing software of some kind (which will always face a high integration hurdle). What they miss is the few companies that are neither of these-truly focused e-commerce, billing or payments companies that are mainly offering a cloud-based or hosted solution. Apart from a large company like PayPal who are trying to offer this kind of service in this sphere (and they have the financial muscle to be highly disruptive without facing much in the way of competition), most companies that are competing here are relatively small at the moment and there are not that many of them. This means that there is a chance to offer quite a differentiated service in particular geographies and within certain market verticals. In addition, there is potential for one or two of these to emerge as a market leader very quickly (most likely in the next 12-24 months) and create a “sea-change” in attitudes and behavior at all levels.

As if the counter-arguments to Javelins conclusions above are not enough to convince us that a big change is coming soon, there are many other compelling benefits that are available right now that will mean the innovative cloud-based bill presentment and payment company will make large inroads into this very large market. This includes the immediate availability of an e-commerce version of bill pay on any merchant web site that wants it, the scope to offer the same service for B2B transactions (and not just B2C which is often the only focus if research in this area). In addition, the ability of the innovator to now offer secure document delivery is not just a more convenient storage option (for consumer and merchants) but means that all online payment related documents like credit card statements and payment confirmations and notices can all go online and be delivered at a fraction of their current cost. Last but not least, all of this technology is available in the mobile sphere too, meaning that merchants can render electronic bills on a smart phone or tablet computer anywhere they have a connection and consumers can pay them on the same devices wherever they are (any place and at any time).

In conclusion, the world of bill presentment and payment has changed little for more than 50 years. The innovators are going to change this world dramatically and the time for this to happen is now.

Will an “iTunes” Type of Web site for ebilling Ever Come into Being?

Last month an interesting article was published on a blog which made a very useful reference to on line music, and iTunes in particular, in relation to ebilling. In his article the author suggested that if we thought about bills in music terms:
• CDs (and the artists that produce them) are like paper bills;
• Listening to music online is like logging in to a portal to view and pay your bill; and
• Downloading a song (file) to your chosen device from iTunes is like receiving your bill as a file (attachment) to your PC, tablet, iPhone, Android, Blackberry etc.

This article rather strangely goes on to conclude that all music and bills should be delivered by email attachment so that customers can open it/them on all their different listening or reading devices.

Despite that fact that this article seems to get a little lost quite quickly, it does draw a useful general analogy and it is therefore worth looking at the core question that it hints at but never answers-will an iTunes type of web site for ebilling ever come into being (and how of course)?

First and foremost let’s get the comparisons right here:
• Songs (or “albums” of songs) should be compared to bills in general
• Artists should be compared to merchants (and some of both are very large and some are tiny)
• Record companies should be compared to banks
• Music listeners should be compared to customers or bill payers
• CD’s (or Vinyl) should be compared to paper-delivered bills
• Online Audio type files (MP3’s, WAVs etc) should be compared to online emails with attachments
• An online store (like iTunes) should be compared to an online bill-payment portal

You’ll notice that we do not yet talk about a delivery device like a smart phone or tablet in the above table-we’ll cover this later.

The Music Scene
If we look back at recent history, up until as little as 10 years ago, the music industry had been operating in similar fashion for decades. Artists produced songs and approached record companies to back them. If they were successful, the record company would help getting the song(s) to market on vinyl as a single or a long play record, getting the songs played on radio and elsewhere so that people would buy what they liked in main street record stores. Innovation in the music industry was very slow to come. Vinyl eventually became CD’s and radio went slowly from analogue to digital. However, the biggest changes were in listening devices, which became increasingly portable. This was led by Sony’s “Walkman” in 1979-the first step towards MP3 players which led to the huge industry paradigm shift-the iPod-introduced in late 2001 (and the new iTunes music store two years later in 2003).

When Apple arrived on the music scene the portable MP3 scene was ripe for change to something simpler and more appealing to customers. In this sense, the iPod, iTouch and finally the iphone and iPad all became the simplest and most user-friendly way to listen to music (both on a live streaming basis and recorded). As a result, the music industry has been almost completely transformed commercially and listeners (or at least those with a 3G/4G connection and/or access to the Internet) have more choice and convenience than they ever had before.

The Billing Scene
So how does this compare to the billing sector? Like music, billing has operating in similar ways for decades. Bills (the song comparison) have been and still are delivered mostly in very traditional ways, especially by small and medium sized merchants (the artist comparison). This is by paper in the mail as the simplest format (a bit like the vinyl single) or by mail with a plain PDF attachment (the CD comparison). In some cases, the email with attachment may be a little more dynamic and sophisticated and can collect signatures for example (used in the B2B billing world). This is more comparable to the MP3 or wav files in the music world.

Although a dominant player like Apple and a site like iTunes has yet to “explode” in the billing world, we are getting very close to it happening now. For some years, online bill payment has been available at a merchant’s web site, although this does make for some inconvenience for customers when they need to pay a lot of bills (or listen to a lot of songs from different artists at different record companies). Online bill payment has also been available at bank sites for many years now and has become quite well-used by the same people who took quickly to Internet banking. Unfortunately, full digital presentment is not normally available via this channel, so both of these valuable innovations are comparable to the “Walkman”-they have taken us some of the way but there is room for improvement.

The private “cloud-based” bill presentment and payment portal is a much newer innovation in the last 2-3 years, and is much closer to being the billing “paradigm shift” we talked about earlier. In this system, customers can see bills from a given merchant (an artist in music terms) and subscribe to get all the bills they send (or songs they release). Because this is non-merchant owned or bank owned (the equivalent of sometimes cutting out the record companies), customers can see many merchants (or artists), and thus have the capacity to ultimately start to see all of their bills in one place. Naturally, paying bills is never a fun activity like listening to music but the quicker and more easily you can deal with them the better (and you can get back to what you like doing much more speedily). Having all your bills in one online place (with free back and storage and easy retrieval whenever you need access) is the equivalent of getting all of their songs in one playbook-just as iTunes allows now. Customers can then keep these bills (or songs) permanently stored in one place and revisit them whenever they like. These bills are all fully digital and do not have multiple file formats that have to be tackled (much as Apple made MP3, WAV and other music file formats an irrelevance to the listener).

Perhaps most importantly, customers can access their bills at the portal from any device that is connected to the Internet by some means-a computer, a smart phone, a tablet etc. And because this is all digital, customers can use all of the currently available and evolving technology that is available such as bookmarking, flexible sorting (like assembling playlists) and using SMS alerts for example (to prompt the customer when there is a bill to pay or a credit card to update, just as you would when a new song or album by an artist has been released). Of course this is not to exclude other ways of getting a bill in any other format that may be wanted-you can still send an email or a PDF or even print them if you like.

Summary
We are not suggesting that bills are anywhere near as much fun to ‘access’ as music and you will of course listen to the same song a lot more than you will use the same bill. However, we think the broad analogy here is a useful one. Our general conclusion is that the online bill presentment and payment portal is already here and like iTunes will transform the bill payment sector over the next few years just as Apple did. There are a few innovative companies that are competing to be the “big gorilla” at the moment but it is inevitable that one of these will emerge soon as the dominant player in this space. A few early adopters (the merchants or artists as they would be in the music scene) already understand this and are quickly getting on board. For these merchants this is a relatively painless transition, with no capital outlay and they can be in the online bill presentment and payment space almost immediately to reap the benefits.

Will Mobile Devices Soon be the Dominant Channel for Payment Transactions?

In the last 9-12 months, those of us in the financial services industry might be forgiven for thinking that the main issues to face and gain advantage from in the near future is going to be who will win the lion’s share of the mobile market when it comes to payment transactions. This arises because of the huge rise in smart phone sales all over the world in the last few years and in more recent times, the fast growth of tablet computer devices (both of which create great mobility for customers). While both of these innovations are certainly exciting and possibly “game-changing” in this article, we will briefly explore whether they will soon really become the dominant payment channel of choice, as many people seem to believe they will. We will therefore look at arguments for and against this prediction.

The arguments for the case
Without doubt, along with wireless access internet innovation, smart phones are a transformational technology. This technology allows individuals to perform many everyday tasks that previously were done via traditional telephony or even on paper in some instances. The same can be said for the newer but just as ground-breaking tablet computers. The added value here is that the larger screen format allows what was previously done mainly on a personal computer in one location to be done almost anywhere because of the high level of portability and touch screen convenience. As we all know, very soon even aeroplanes will allow the use of both smart phones and tablets via the internet (and the last bastion of true peace from cell phones and computers will disappear).

Of course the two “gorilla issues” here are the use of NFC or Near Field Communication technology which allows the smart phone to become a credit or debit card, and the linked facility of a smart phone as an electronic or digital wallet, capable of storing value and therefore having the capacity to readily make may payment transactions including person-to-person payments.

NFC has a short range of about 1.5 inches. This makes it a good choice for secure transactions, such as contactless credit card payments. Smart phones can therefore “tap and go” using infrastructure already in place for credit card systems such as MasterCard’s PayPass program or Visa’s payWave.

Smart phones can now also replace customer loyalty cards, not only by storing retail store credit card information, but also automatically select the right customer loyalty card information for a given consumer purchase.

The “digital wallet” concept could extend to coupons and other offers. Consumers can now download coupons from a web site, which they exchange by having their phone swiped at the point of purchase. The retailers benefit from being able to track who their coupons are sent to and how they are used.

If you add in the benefits of smart phone tickets (for trains, buses an car parking for example) and the use of phone-based barcodes (as infrastructure allows) we can quickly see how this technology will dramatically change the consumer purchase experience in many areas (especially at the retail level) and help many merchants to gain efficiencies and save costs.

The arguments against the case
In considering the arguments against the proposition that mobile technology is soon going to be the dominant channel for payments, it is worth establishing a few facts about smart phones and tablets. Firstly, there were around 450 million smart phones sold around the world in 2011. As there are about 5.5 Billion mobiles phones in total (which means that around 80% of the world population own one) smart phones represent about 8% of the total-a number expected to go to 12% within 5 years and 20% in 10 years-meaning around 1.2 billion smart phones will be owned by 2022.

As far as tablet computers are concerned, there were around 75 million of them sold in 2011 (compared to 440 million PC sales), with predictions of at least 250 million in 5 years and 750 million with 10 years (although these figures are much more speculative of course). As a percentage of all computers (there are around 1.3 billion computers in use in total in 2011), this means that tablets represent about 4% of the market today, predicted to grow to 7% in 5 years and 15% in 10 years. The reason that % growth of tablets is much slower proportionally than smart phones by the way is that PCs have a much longer life, with companies and individuals holding on to them for 4-5 years or longer before upgrading or changing.

Given the above, it is difficult to see how mobile technology can quickly become the dominant channel for payment, even before we consider other issues. At best in 5 years time only 12% and 7% of consumers (with each technology respectively) will be able to pay on their tablets and smart phones (and only if they wish to of course). This is higher in the younger age groups naturally and is still a lot of transactional volume but not dominant by any means.

To add to the above, about 75% of all payments transactions today take place “offline”. In other words, bills are sent out by physical mail or email (with PDF attachments) and are still paid over the counter with cash and debit/credit cards and by cheques in the mail or by phone or voice over IP. Larger payments are made via internet banking via direct debit and by businesses via bank payment systems such as wire transfer for instance. It is hard to see any of these processes changing quickly, especially in the B2B space, although cheque volumes will continue to decline at the expenses of electronic payment for both consumers and businesses.

Perhaps the other major disadvantage of mobile technology is one of available infrastructure. All smart phones and tablets create much greater accessibility but are only useful when they are connected. 3G and 4G is expensive today for large data packets and access to the Internet relies on old-world “hubs”-most of which rely on old copper-wire systems. NFC technology is perhaps less encumbered as it is more like “Bluetooth” but it still needs a device with which to communicate, and in a payment situation this means that every retailer needs a reading device. Installing such devices is happening of course but it will take time and will only penetrate those market verticals where it makes sense.

So what does it all mean?
Now that we have all of the above figures and facts on both the plus and minus side what does all this mean for payments? Well, its obvious that the times are changing and in the consumer world we will see very fast rises in payments being made not only online in years to come (at the expense of more traditional methods) but a large proportion of these will be made on smart phones and tablet computers, especially in the under 30 population. However, as a proportion of the total transactional volume it is likely to be much slower than the media hype suggests. This is because retail (where much of the take-up will occur, makes up only 10% of the consumer transactional volume. Consumers themselves, of course, are typically only half of the total market transactional volume and less than a quarter of the payment value. The rest is taken up by Government and Business and both of these are likely to take many years to adopt mobile technology into mainstream payment systems-perhaps 15-20 years. For this reason, and the fact that we continue to leverage old system payment “rails”, we can conclude that mobile devices are interesting and growing as a payment option but will be far from dominant for a few years yet. Smart phones (with NFC technology) are therefore likely to slowly replace the “bricks and mortar” retail market (helping customers to migrate from a plastic card to a mobile device). And as both smart phones and tablets are effectively mobile enabled PC’s that will make all forms of payments easier and increase/accelerate on-line payment activity this will be a good thing for both merchants and consumers when it comes to the ease with which future payments can be made.