GET READY for ON LINE Billing & Payment.

• Author: Singh, Laurie Kaplan

The world of B2B e-commerce has exploded in the past two years, with approximately $433.3 billion in global transactions flowing through the Internet last year, according to the Gartner Group. But the Web isn't yet much of a payment vehicle: only a fraction of these transactions were invoiced and paid via the Internet.

"The [B2B] marketplace brings buyers and sellers together to procure," says Gregory Domaracki, assistant vice president and product design manager for treasury management at PNC Bank in Pittsburgh. "But once market participants source goods, they go offline to complete the transaction via traditional payment practices."

However, changes are in the works. Thanks to a proliferation of new electronic bill presentment and payment (EBPP) solutions, invoice and payment and settlement processes are coming on line. According to Gartner, the number of enterprises sending business customers invoices over the Web will quadruple in the next three to four years, from 9 percent today to 35 percent by year-end 2004. Ultimately, the new electronic billing and payment systems are expected to streamline the entire order-to-cash process in an electronic, Web-enabled environment. Eventually, users will be able to source goods, receive and approve invoices, resolve disputes, get financing and click a button to effect payment and settlement on line.

Driving the trend towards online invoice, payment and settlement processes are sellers who want to get paid faster. And no wonder -- the time to collection for the average Internet sale is about 41 days, Gartner says. Widespread adoption of EBPP is expected to significantly reduce this time frame.

Electronic invoice and payment solutions also have the potential to lower sellers' transaction costs dramatically. A Gartner survey indicated that sellers expect electronic billing and payment to lower their cost of producing an invoice to $1.65, from $5 for a paper invoice. Sellers also expect that EBPP will enable them to roughly halve the cost of resolving invoice disputes, to about $10 a dispute from $20. These savings will stem from sharp reductions in labor, postage, paper and equipment costs associated with the switch from manual to electronic processes.

Significant savings

Buyers also can expect to realize significant time and cost savings from the adoption of EBPP. Andy Eliopoulis, senior director of Internet bill presentment payment at iPlanet E-Commerce Solutions, notes that a reduction in sellers'...