Card-Based Bill Payments Take Another Step with Billeo Product

Billeo Inc., whose software streamlines online bill payment for consumers, this week announced new product enhancements that the Santa Clara, Calif.-based company hopes will allow banks to earn more bill-payment revenue. It also extends the company's reach into online shopping with a new software component that automatically fills out online checkout forms and saves transaction-confirmation pages. Billeo, which maintains a directory of 6,000 billers whose sites accept online payments, up from 5,200 a year ago, hopes to make online bill pay profitable for banks by making it easier for consumers to use credit and debit cards at both biller and bank sites. Some 3,500 of the 6,000 billers the company tracks accept cards, while banks earn lucrative interchange income on card payments. By contrast, bank sites typically don't offer a card option but pay third-party processors fees averaging $5 per user per month to handle automated clearing house transfers, according to Billeo, which estimates banks can earn $60 per user per month from payments based on their cards. “Banks need a way to re-engage with consumers,” says Murali Subbarao, founder and chief executive of Billeo. To that end, Billeo has stitched together into one product three software components, including the new Shopping Assistant as well as two existing products, Bill Pay Assistant and Password Assistant. The components automatically keep and fill in passwords for consumers, fill in online forms, and save confirmation pages. For card payments, the product automatically fills in card-account numbers, expiration dates, and other information typically requested by sites. The product, which is launched from a toolbar, is free to consumers. Billeo is talking to banks about offering the integrated product with their own brands attached to it. In this model, the bank will be able to feature its own card products at the top of the available payment options, and could offer other inducements, including an updated figure that tracks the available credit limit. Subbarao does not expect bank clients to preclude cards issued by other banks. “Banks see value in keeping the wallet open,” he says. “It's a given that none of us are wedded to one bank. And by opening the wallet, [clients] get to see what share of wallet they have.” For this hosted service, Billeo will charge banks a fee that will likely be tied to the value of each transaction, Subbarao says, in addition to licensing and maintenance fees. The new product from Billeo follows by 13 months the introduction of a bill-payment product from software house Yodlee Inc. that is also intended to help banks cash in on card-based bill payments (Digital Transactions News, June 27, 2006). Online bill pay via cards is taking off, says Subbarao, because all players benefit: banks earn more income, merchants deal with fewer service calls, and consumers earn rewards.