- The Washington Times - Thursday, May 2, 2002

NEW YORK (AP) It took Dan Fitzgerald and his wife almost two weeks to drive from Connecticut to Oregon. On the way, the couple stopped at Yellowstone National Park, the Wounded Knee National Memorial and a sleek Internet cafe in southern Wisconsin.

"It was the end of the month, time to pay my bills," said Mr. Fitzgerald, 45, a database consultant who lives in Portland, Ore. "I made my car payment. I paid my gas card. And I made a donation to the Libertarian Party."

For $10 a month, Mr. Fitzgerald subscribes to PayMyBills.com, a consolidator service that receives his forwarded bills, and scans and displays them on its Web site. With a few clicks twice a month, Mr. Fitzgerald looks them over and sends each an electronic payment, drawn from bank accounts from which he's authorized payments.

"It certainly addressed one of my biggest weaknesses, which is getting stamps and envelopes," Mr. Fitzgerald said. "I'd always end up paying late."

Not only are more Americans trading pens and checkbooks for computer keystrokes, big telecommunications firms and utilities are also saving bundles by offering consumers online-payment alternatives.

On June 30, the price of a first-class U.S. postage stamp jumps from 34 to 37 cents. That may not anger the average consumer. But the increase will devour revenues at bill-mailing corporations like long-distance carrier AT&T Corp., which mails 49 million paper bills per month at a cost of about 40 cents apiece, said Katherine Bagin, the company's vice president of e-business strategy.

The extra postage will cost AT&T around $1 million a month.

To get around the rate increase and for other reasons AT&T and other big telecommunications companies are turning to e-mailed bills and electronic payments, said Jason Briggs, technology analyst with the Yankee Group in Boston.

Consumers seem game.

The portion of Americans who paid bills online doubled between 2000 and 2001, from 4 percent of U.S. consumers to almost 9 percent, the Yankee Group found. For those with broadband Internet connections, the number is 14 percent.

Most paid their bills directly on the corresponding merchant's Web site, Mr. Briggs said, while a smaller number used consolidator sites like PayMyBills.com.

In the same one-year period, AT&T's stable of online-billing customers tripled, from 300,000 to 1 million. At carrier SBC Communications Inc., the number more than quadrupled, from 134,000 to 600,000.

To push customers away from paper bills and onto the Internet, AT&T, MCI, Sprint PCS and other companies periodically tempt customers by offering $1 discounts on monthly phone bills, $25 gift certificates to Amazon.com or sweepstakes prizes.

"It's become part of our corporate mantra," AT&T's Miss Bagin said.

A slew of companies offer online bill-paying services. Most are banks, brokerages and portal sites like Yahoo and the U.S. Postal Service.

Many of them use online payment software and services sold by CheckFree Corp., which helps vendors including AT&T process payments and add interactive billing to their Web sites.

CheckFree marketing director Terrie O'Hanlon said she expects use of the system to catch on slowly but steadily, as use of automated teller machines did.

Six million U.S. consumers use the CheckFree system, which drops the cost of sending and processing a bill to about 20 cents, Miss O'Hanlon said. Other companies offer similar software and services, including Avolent Inc., Edocs Inc., Metavante Corp. and Princeton eCom Corp.

Online bills have an added benefit for the company. They shunt help-seeking customers to the company Web site, or failing that, to contact the company via e-mail.

Mr. Briggs said a single call to a human customer-service agent sets a company back $5 to $10. Miss Bagin says it costs AT&T up to $5.

"Online billers tend to take care of these problems on their own," Miss Bagin said. "They don't call us anymore and they're more satisfied."

Once customers are hooked, companies will use their Web sites to serve ads and try to sell more goods and services while customers are paying bills, said Mr. Briggs.

They do this now, with the coupons and fliers jammed into the billing envelope, but impulse-buying on the Net is easier to tailor to individual preferences.

Long-distance carriers, tired of fickle customers who shed companies like a snake slithers out of its skin, also hope online payment will shrink their "customer churn rates."

A customer who takes the time to set up an online account is displaying allegiance and is less likely to jump at the sight of a better deal, said Yolanda Martinez, SBC's director of electronic-channel strategy.

"We're doing it for [customer] retention," she said. "It's harder for them to change and go to another provider."

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