NEW DELHI, September 27
Sometimes moving first is all you need to capture an industry.
By introducing BillJunction.com, India's first, and at present, the only universal bill presentment and payment service, ICICI bank is trying to replicate the success of ChequeFree, the first mover in the online bill payment service in the United States. ChequeFree controls 90 per cent of the US market, and was the first to introduce the concept of online bill payment there. "Once you get your customers, and they are comfortable with you, then, in this industry, it is unlikely that they will shift," says an optimistic Bikramjit Sen, chief operating officer, Bill Junction Payments Limited.
BillJunction.com, has been incubated by the e-commerce group of ICICI to venture into the business of electronic payment of bills. It works like this. Companies will send details of customer bills to BillJunction.com, which would then send e-mail to the customer, who can then schedule payments. BillJunction will then pay the bill, and confirm by e-mail.
The facility will also use RBI's electronic clearing service (ECS) mechanism to enable bill payments, thus allowing customers of all ECS member banks to avail of the facility at a nominal Rs 5 per transaction. There will be no need to have a bank account with ICICI.
The service is up and running in Mumbai, and is now in Delhi. The company, going by market research on Internet penetration, is planning to launch the service in Calcutta, Bangalore, Chennai, Hyderabad, Ahmedabad and Poona soon.
The company plans to launch an aggressive advertising and direct marketing strategy to sell the concept to the public. The advertising strategy, to be handled by Trikaya Grey, will emphasise on the unique features of the service. The idea is to sell the concept as well as the brand. In keeping with its effort to project a serious image, BillJunction will not have banner advertising at its site.
On the anvil, and already on at Mumbai, where the concept was launched in May 2000, are mobile vans, direct marketing, lobbying in industrial houses. One unique feature of the marketing strategy will be the presentation of the concept in educational institutions to convince kids, in the hope that the new Internet savvy generation will then persuade their parents to pay off bills online.
The marketing strategy has three steps. First, ICICI will launch the service in cities. In Delhi the company is tying up with city billers like MTNL, VSNL, Airtel, Essar, Escotel, ICICI bank credit card, Satyam Infoway and Roltanet. The company will move on to national billers like credit card companies, and then, in the last stage, try to target niche billers, like clubs, schools etc.
To use the service, there is no need to have a credit card account, a feature that the company is putting forward as its USP. The feature was incorporated after market research showed that even in the United States, where credit card penetration is the highest, consumers preferred to pay through bank accounts rather than by credit card.
The major obstacle to Indian e-commerce has been the security problem, which the company is addressing. Company officials say that the risk of online bill payment, where the customer has to punch in his bank number on to the Internet is only as much as writing out a cheque. However, the crucial difference is that no one hands in a cheque to a stranger.
Company officials insist that ICICI has addressed the problem of security. The system will use 128-bit encryption, a technology so secure that, in the wake of the nuclear blasts of 1998, it was embargoed by the United States because of possible military applications. There are other features, like passwords being send to those who forget only by courier, and not by e-mail, as is usual, and the payment of bills only after three days, so that even if a hacker were to access someone's account, the consumer could stop payment by alerting BillJunction.
However, for such IT-enabled services, say lawyers, it is not very clear as to the legal responsibility that the company will have to assume if an account is hacked. Officials are optimistic, "We don't even forsee such a situation" says Bala Deshpande, head of marketing, e-commerce department, ICICI Bank.
ICICI has already used the Net to direct market its products. When it went on a mobilisation drive to increase its NRI depository account, its UTS agency, Contract, used the Internet to campaign through India-specific sites. The campaign helped ICICI to mop up Rs 50 crore worth of new accounts. The marketing campaign for BillJunction will mix the Net and traditional direct marketing media in a ration of roughly 50:50
In a bid to have the rub off effect of associating with prestigious companies, the company has tied up with such major companies as Airtel and Essar. The idea: If they trust us, so can you.
The company is targeting an estimated 75,000 users by the end of 2001. The service in Mumbai has 3,500 registered users. Striking an optimistic note amid the debris of dotcoms, Sen says, "We are not a dotcom. We are an IT-enabled service."
ICICI has invested Rs 2 crore in the portal. It is hoping that with the growth of the Internet, and more important, the moving of the Net away from the PC and on to TV through such technological innovations like the TV set-top box, the customer base will explode. "Anyone who pays a bill is a potential customer," says Deshpande.
That may be so, but convincing the wary consumer to forget the sweaty queue and the rude clerks and to instead punch in his or her bank account number online may not be as easy a task as it seems.
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