Banks and Finland Post compete on electronic invoicing market
Consumers remain minor group of users: corporations use e-billing for years
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Competition on the market for electronic invoicing is intensifying in Finland. Finnish banks said on Monday that they would start to start an intense marketing campaign to promote network billing among individual consumers. So far, they have concentrated on fine-tuning the system, and marketing their e-billing services to corporations.
The banks' efforts on the electronic billing market could undermine the position of Finland Post Corporation in traditional billing by letter. In addition, the banks are more aggressively challenging the Internet billing service, which Finland Post has been using for years.
The e-bill developed together by Finnish banks is the electronic equivalent of a paper invoice, which appears for payment in the recipient's Internet banking service.
The advantage of electronic billing for the consumer is that it eliminates the need to type in account numbers, reference numbers, and other information when paying a bill. It is enough to confirm the ready invoice with the right code.
For the recipient of the money, electronic billing is more convenient and cheaper than paper bills. Companies producing invoicing systems say that the use of on-line billing could bring billions in savings to those sending invoices.
In payments between companies, e-billing has been in use for years. At present, 5-10 per cent of Finnish companies use it, says Antti Larvala of Aktia Bank.
The first steps toward extending e-billing to individual consumers were made by the OP Bank Group about a year ago. At the moment, banks in the group have about 25,000 private customers using electronic billing. The bank says that the number is increasing by about 1,000 a month.
Other Finnish banks have now joined the efforts, and all large banks have the readiness to introduce electronic billing. Director Antti Larvala of Aktia Bank believes that extensive advertising campaigns will be seen in March.
The decrease in paper invoicing could have a powerful impact on Finland Post Corporation. At present, 60 per cent of letters that it handles are bank statements, receipts, and pay calculations. The company has sought to respond to the challenge with its own Netpost system.
In Netpost, electronic invoices are sent to a server maintained by Finland Post. The user logs on with his or her user codes, copies the information of the invoice to pay the bill via his or her on line bank.
Not all information needs to be put on the on-line form: the Netpost bill has a numerical code that is equivalent to the bar code on a paper bill, which can be copied and pasted into the payment form.
At present, Netpost has 50,000 active consumer-users, who get invoices and other messages through it. Paying bills is free of charge both in Netpost and with the banks' e-billing systems.
Not all bills can be paid as electronic bills: entities sending invoices must offer consumers the possibility of doing so. Currently there are about 120 entities - both companies and public institutions, that offer their customers the possibility of paying via Netpost.
Banks do not have precise figures on the number of companies that use electronic billing. Aktia's Antti Larvala says that the most active users of e-billing are telecommunications operators. "Energy companies have also made it clear that they will join in."
The cost to a company for sending an electronic bill is EUR 0.25 per invoice. In addition, there are monthly fees that can vary between EUR 5-10.
The average cost of a Netpost bill is EUR 0.30. The more a company uses it, the lower the price.
Finland Post charges its corporate customers EUR 0.33-0.41 for sending a paper invoice through the mail. The greatest savings from electronic billing come from the fact that the sender does not need to handle paper bills.
Joining the e-billing system of the banks will not bring significant costs to small companies. Using Netpost requires that the company is linked with the systems of Finland Post, which costs EUR 4,000.
For large companies, joining the electronic billing system provided by banks can be expensive, because the company's computer systems need to be adapted to be compatible with them.
Helsingin Sanomat
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| 13.2.2007 - TODAY |
 Banks and Finland Post compete on electronic invoicing market |
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