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The Future of Mail and Transaction Documents

The “E” Initiatives:  Why Go Online?
For any business executive that surveys the competitive landscape the picture that emerges is of the growth of online activities in all segments of the enterprise. In financial services, banking, insurance, retail, manufacturing, and communications there has been an explosion in enterprise-managed web sites developed to enable online order entry, bill and invoice presentment, bill paying, and self-service account management. In some industries there has been a dramatic increase in the number of online brokerages for business services and online commodity auctions, as well. The electronic systems initiatives are a high priority because they are perceived as directly impacting the efficiency and profitability of the enterprise. You see it in business-to-business activities where financial transactions such as Requests for Information, Purchase Orders, Trade Confirmations, Invoices, Payments, Letters of Credit, and Receipts that were once entirely paper bound are moving toward electronic transmission for every step in the supply and accounting chain.

The driver for a move to electronic billing and payments in the business sector is clear. Speed up the time it takes to enter a purchase order and move it into the business stream for processing. Speed the time it takes to generate a bill for a fulfilled purchase order and update inventory. Speed the time it takes for a bill recipient to acknowledge the bill, and process it for reconciliation and payment. Speed the time required to account for the received payment and update all of the associated accounting records at every point in the supply and fulfillment chain. Faster billing, payment and reconciliation with reduced labor hours processing paper, re-keying data, and handling discrepancies.

For the consumer the story does not appear to be as compelling. Indications are that the migration online is happening, but at a slower than anticipated pace. Adoption rate for online presentment and payment services among consumers appears related to household income, with the fastest adoption coming from households with annual incomes of $100,000 to $149,999. The year-over-year growth for those households is identified at 20%.

While businesses may push an electronic alternative in the direction of the customer, the customer has to overcome a variety of hurdles to accept the offer. For the current generation of bill payers there is still the comfort factor of bill paying via check. Long established patterns of paying bills will continue to be difficult to break without incentive.

CAP Ventures research indicates that among transaction document owners, the perceptions are that e-presentment has not been adopted as quickly by consumers as many anticipated because of concerns about security. This is something that vendors must address if they hope to gain the benefits of e-delivery. Our research indicates that access, ease of use and incentives are higher barriers to adoption.

But there are changes afoot. In a February 2003 press release the Federal Reserve Board (FRB) said that their current review of check processing indicates that 60% of all non-cash retail payments today are done with paper checks, down from 85% in 1979. They say that 40 billion checks were written in the US in 2002, down from 50 billion in 1995.   


To develop a realistic appraisal of when and how to move forward with an “E” initiative requires a careful strategic study of the current print and mail processes, accounting processes, and the applications that drive the enterprise. For example:

  • What are the real current costs of maintaining the systems and processes as they stand?    
  • What are the risks associated with maintaining the current systems and processes?    
  • What are the current timeframes and costs associated with re-keying, scanning/OCR, and other manual input?    
  • What are the real costs associated with enabling applications for electronic commerce?    
  • Are suppliers and customers ready to transact business online?

Electronic delivery and payment initiatives should be considered carefully, but they should be considered. To support those efforts requires coordination with management initiatives that should be viewed as part of tightly integrated implementation that will impact the future of mail and transaction documents.

The preceding analysis has been abstracted from the CAP Ventures multi-client entitled “The Future of Mail and Transaction Documents,” which provides document technology vendors, service providers, and organizations or businesses with critical information to guide the development of product and service portfolios related to transaction documents and direct marketing. For more information about this and other CAP Ventures studies, contact Alison Hipp at  ext. 126.


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