Electronic billing

Electronic billing or electronic bill payment and presentment, is when a seller such as company, organization, or group sends its bills or invoices over the internet, and customers pay the bills electronically. This replaces the traditional method where invoices are sent in paper form and payments are done by manual means such as sending cheques.

Advantages to electronic billing include the faster presentation of invoices and reductions in costs compared to handling paper documents. However, to take full advantage of electronic billing both seller and buyer need to have in place computer systems able to handle electronic billing and have access to financial institutions that can do electronic payments.

History

The development of electronic billing and payments started in the late 20th century, and whilst its exact origins are unclear, it is generally agreed that development of electronic billing coincided with the rise of the Information Age. It went hand-in-hand with the development of internet banking, introduction of accounting software and widespread use of email.

In the United States, the Council for Electronic Billing and Payment of the National Automated Clearing House Association (NACHA) is credited with broadly promoting and communicating various forms of electronic billing in the early 2000s. NACHA promoted activities and initiatives that facilitated the adoption of electronic payments in the areas of Internet commerce, electronic bill payment and presentment, financial electronic data interchange (EDI), international payments, electronic checks, electronic benefit transfer (EBT) and student lending. Certain electronic billing applications also provide the ability to electronically settle payment for goods or services.

Types of electronic billing

Biller-direct – where consumers make payments directly to one biller that issues bills that they receive at the website of the firm that issued the bill.