Yahoo! to Make Bill Paying E-asy

According to industry analyst Zona Research, Inc., Yahoo! Inc.’s new online bill-paying service has the potential to change the e-commerce landscape forever.

The new Yahoo Bill Pay service will allow users to electronically pay any U.S. biller, including companies and individuals. Those who aren’t able to accept electronic payments will be mailed a paper check by CheckFree Holdings Corp., the third-party company providing the service.

The cost of the plan varies, depending on the number of bills that users pay online. The flat plan costs $2 (US$) a month, plus 40 cents per payment. However, users who plan to pay a lot of their bills via the Internet can choose to pay $7 a month for as many as 25 payments — and 40 cents for each payment thereafter. To help the program catch on, Yahoo is offering users who sign up now a free three-month trial run.

Rave Review

While electronic bill payment services are nothing new, Zona Research was impressed enough by Yahoo’s announcement yesterday to issue a “flash” report.

“Bill Pay provides features that are both original and likely to be well received,” the report said. “Since the emerging currency for many in our culture is time not money, we believe Bill Pay offers users advantages by eliminating many time-consuming activities associated with paying bills.”

Zona feels that the new program will work well with such online grocers as Webvan and Peapod. Plus, since Yahoo! claims a well-branded network of shopping and information that serves about 80 million users, yesterday “may eventually be remembered as the day electronic bill paying systems went live for the masses.”

The Downside

Although the number of households paying their bills online is expected to mushroom from today’s 1.8 million to more than 18 million in 2003, some analysts feel that there is a downside.

They feel that such projections are much too high — especially in light of the security issues that currently surround e-commerce. They point out that as more people go online, e-marketers will have their hands full with trying to sell the masses on using the Internet to make a purchase.

Analysts add that it is wishful thinking to believe that millions of people will be willing to automatically list all their bills on a Web site and trust a third-party to pay them. In addition, they contend that most consumers are creatures of habit and will be reluctant to exchange their check-writing ways for digital bill paying.

More Coming Onboard

Nonetheless, Norcross, Georgia-based CheckFree watched last week as its shares rose 25 percent in anticipation of more such partnerships being formed.

Industry observers speculate that CheckFree could extend its service to America Online within the next couple of months.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

E-Commerce Times Channels