Value positions for financial institutions in electronic bill presentment and payment (EBPP)

Business to consumer (B2C) electronic commerce has led to new relationships connecting various supply chain partners via the Internet, significantly increasing the quantity and quality of inter-organizational information flows. Banks are traditionally partners in the information and financial flow elements in the supply chain, but other nonbank parties are also getting involved in these activities. Electronic bill presentment and payment (EBPP) may be defined as technology solutions that allow billers to present their bills electronically to companies and enable companies to initiate electronic payments (Au and Kauffmann, 2001). EBPP may be seen, therefore, to have two main components: presentation of the bill and payment of the bill. The strength of the traditional role of banks will be seen in the second component, as billers and consolidators still do not have fiduciary powers of banks to actually pay the bill. Banks are providers of trust, play a role in insuring against credit risk and provide an infrastructure of network relations to businesses, governments, and individuals (Eriksson and Fjelstad, 2001). The paper advances a structural frame to explore the possible B2C value positions that banks may undertake in the area of EBPP. Banks will need to assess where the value proposition is for them in the various business models used in EBPP, and how best to leverage their position as a neutral trusted third party (TTP), so to modulate and reduce the risk for buyer, seller and the overall marketplace. Some case studies are described with the proposed frame.