New paradigm for b-to-b

Although EBPP (electronic bill presentment and payment) has long been a key component of b-to-c transactions, b-to-b transactions are still largely handled by legacy, batch-oriented methods, such as ACH (Automated Clearing House). To CTOs and other business leaders, EBPP may not seem like a huge priority but it should. Legacy methods of supporting electronic transactions require separate communications programming and integration efforts for each trading partner. This adds to the cost of processing b-to-b transactions and also makes it difficult to add or change trading partners.

Using XML and other Web standards to process billing and payments allows companies to avoid reinventing the wheel for every trading partner, providing a number of advantages compared with customized legacy methods. By migrating EBPP processing with all trading partners to the same Web interface, businesses can reduce costs, automate workflows using a single standard, and increase the amount of reporting capabilities to better manage the billing and payment cycle. They can also adapt to changing market conditions more quickly, because new suppliers and customers can be integrated much more easily via the Web than via legacy methods.

The current billing and payment processing market is awash in a sea of offerings. Among the vendors offering software and services for handling b-to-b EBPP processing, the current front-runner is CheckFree. However, a few other vendors, such as Metavante and Princeton eCom, are gaining ground. Vendors such as these offer EBPP solutions that go beyond simply handling transactions for e-commerce Web sites by supporting the exchange of XML and other standards-based messages necessary for back-office b-to-b transaction processing.

By contrast, another class of offerings supports basic transaction processing, making these solutions ideal for handling credit card purchases for e-commerce sites, for example. But these solutions may or may not have the capability of handling b-to-b EBPP operations, which requires formatting electronic versions of business documents such as bills, invoices, and statements, and routing them to business partners according to specific business requirements.

Companies wanting to automate payment and billing transactions for e-commerce Web sites should look to providers such as CyberCash (whose Internet payments business was recently acquired by VeriSign), VeriSign, and CyberSource. In particular, VeriSign is well known for handling secure transactions for e-commerce Web sites.

A number of vendors support electronic checks, including (, providers of the PayPal service, and ( These solutions are ideal for small and midsize businesses, but it remains to be seen if they can support the back-office EBPP transaction requirements of enterprise b-to-b environments.

When examining available solutions, CTOs and other business leaders should be concerned with implementing EBPP solutions that adhere to open standards while supporting the strong security measures needed to allow b-to-b electronic billing and payment processes to traverse the Internet. Look for solutions that support XML as defined by the World Wide Web Consortium (W3C) as well as strong encryption measures.

Additionally, contact the providers of your existing accounts payable and accounts receivable software. You'll likely need to update the interfaces to these financial applications to take advantage of the automation supplied by EBPP solutions.


If managing your b-to-b EBPP strategy in-house seems like a daunting task, it may be advisable to consider a PSP (payment service provider). Outsourcing your EBPP strategy makes a lot of sense if you do business with several different trading partners.

A PSP can help you consolidate EBPP transactions and simplify integration with your in-house financial applications. In addition, many PSPs offer other services, such as transaction validation, additional reporting, or cash management advice. Be mindful, however, that these additional services usually come with a cost.

Most PSPs use one of three pricing models. The first approach is for the PSP to charge you based on a percentage figure of the overall value of your transactions. A second popular method is to charge a flat fee for every transaction regardless of dollar amount. A third approach is for the PSP to charge you an amount based upon the volume of transactions it processes for you.

As with any outsourcing arrangement you may have, you need to do your homework before signing up with a PSP. Ask about encryption methods, examine the PSP's datacenter, and check to see what type of backup and recovery methods the PSP offers. Be sure to get a well-defined SLA (service-level agreement) that spells out how the PSP will ensure reliability, availability, and accountability.

As with in-house solutions, if you outsource your EBPP strategy to a PSP you'll find that services fall into three categories. Some PSPs focus on billing, others focus on electronic payments, and still others focus on Web-based e-commerce.

Your b-to-b EBPP strategy should include both bill presentment and payment. Be careful to select a PSP that can support both sides of the equation. Also, examine carefully the integration options your PSP might be offering. Although the PSP may handle all of your billing and payment transactions, you may need to integrate that information with your accounting software yourself.

What's next

It is clear that migrating from batch-oriented, legacy methods of processing b-to-b billing and payments will save your company money. Using the Internet and XML instead of legacy methods of communication and transaction formatting will reduce the cost of supporting billing and payment interactions with multiple trading partners.

What is somewhat unclear is the state of the EBPP market going forward. Expect consolidation among software and service providers, and expect b-to-b EBPP eventually to become as commoditized as b-to-c billing and payment processing is today. Guard against uncertainty by sticking to solutions based on open Internet standards.

How can you prepare your company's EBPP strategy today? Start by talking to your trading partners about their plans for EBPP. Begin to investigate solutions and possible use of PSPs. Finally, perform a cost-benefit analysis of your existing legacy billing and payment processes vs. the implementation of Internet-based EBPP.


Electronic billing and payment

Executive Summary: Implementing an Internet-based EBPP solution is a cost-saving improvement over traditional, batch-oriented billing and payment processing. Rather than requiring customized interfaces for each trading partner, EBPP enables businesses to reduce costs by standardizing on transmission methods and transaction formatting.

Test Center Perspective: The EBPP marketplace is now mature enough to warrant the exploration of possible solutions. Toward this end, both in-house solutions and outsourced payment service providers should be considered while keeping security, reliability, and integration in mind.

Contributing Editor Maggie Biggs has more than 15 years of business and IT experience and still remembers the joys of creating 2780/3780 ACH processing programs.

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