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Should snail mail fail, don't wail, hail the new grail:
 the Postal Service offers online bill-paying

Holden LewisGet excited the last time you visited the U.S. Postal Service's Web site?

Oh. I see. You haven't been to the Postal Service's site lately. Or ever. That doesn't bode well for their newest venture.

But, we'll see.

Probably once or twice a month, you drop a pile of bill payments into a mailbox, each bearing a 33-cent stamp. The Postal Service invites you to pay at least some of those bills electronically -- through its Web site.

The agency has begun offering online bill payment through CheckFree, allowing you to pay anyone in the United States. And some billers, mostly utilities, can deliver electronic bills to you via the Postal Service Web site and stop sending them by snail mail.

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CheckFree offers similar services through Yahoo, Quicken.com and several banks. And that brings up the following question: If you want to pay bills online, you have lots of choices, so why do it through the Postal Service?

Because it's trustworthy, says Matt Lewis, CheckFree's executive vice president for electronic commerce products and marketing.

"It means that the same entity that millions of Americans have trusted for decades is there for them today and can stand behind the delivery and payment of all their bills with the same trust and faith that the U.S. Postal Service has stood for all these years," Lewis says.

Will the letter carrier deliver, electronically?
His flag-waving practically brings tears to my eyes. I'm rather a fan of the Postal Service. I think it does a fine job overall. But many people slag the Postal Service for inefficiency, and it has been the butt of hundreds of tired jokes by the creepy Jay Leno and other comedians. With a reputation like that, does the Postal Service really expect people to flock to its site?

"They're just trying to find new business to get into to justify their existence," says Robert Sterling, an analyst with Jupiter Communications, an Internet commerce authority. "It's one more arrow in their quiver that they think might help them out."

The Postal Service makes a rational decision by defending its turf. It stands to lose a lot of stamp sales in coming years because of online billing. Forrester Research has estimated that 13 percent of bill payments will be made online in 2004.

But Sterling says Jupiter research suggests that people who want to pay bills online would rather do it through bank Web sites or using personal-finance management software such as Quicken. Few want to pay their bills through non-finance-related sites.

"The point is that even Yahoo hasn't done extremely well with this service, and a lot more people go there than to the U.S. Postal Service site," Sterling says. "Nobody associates the Postal Service's Web site with bill payment and bill presentment."

But surely people associate the Postal Service with receiving and paying bills. Maybe people will consider it natural to do the same thing through a post office Web site.

e-paying explosion
There are those like me who wonder if this deal might be big enough to finally make online bill-paying a nationwide hit.

Lewis says the Postal Service's stamp of approval will confer legitimacy to online bill-paying because it's a big, trusted organization that people encounter in their daily lives.

"The significance is the formal, official recognition by the U.S. Postal Service that Americans can and will use the Internet to pay their bills," Lewis says.

He compares the Postal Service's deal with CheckFree to the introduction of credit cards and automated tellers -- events that transformed the world of personal finance.

Still, the biggest barrier to widespread adoption of online bill-paying is cost. Customers who sign up through the Postal Service site get a 6-month free trial. After that, there are two payment options, and the bottom line is that it would cost $6 a month to make 10 to 20 payments. Fewer than 10 payments would cost less and more than 20 payments would cost more (40 cents for each).

Why would you pay $6 to make 10 online payments a month? That's 60 cents a payment, and stamps cost 33 cents. The way the Postal Service charges to make online bill payments, you save money only if you pay more than 18 bills and fewer than 29 each month.

The Postal Service promises that it will introduce a new wrinkle: an electronic postmark that would stamp an electronic payment with the time and date that it was sent. This could come in handy when a biller says it didn't receive your electronic payment. Unlike an e-mail header, the electronic postmark would be difficult to alter.

And, sometime in the not-too-distant future, the nice Postal Service people will offer us person-to-person cash transfers via their Web site, too.



Afterword

What would you think about pay-as-you-play banking? 

Sony's Playstation2 will go on sale this fall, in time to become the must-have item for Christmas. Don't call the Playstation2 a toy; for most families that own one, this computer game console will be the most powerful computer in the house. It plays audio CDs and video DVDs. You can connect a hard drive and PC cards to it. Using an add-on modem, you'll be able to connect it to the Internet through phone or cable lines to download games and maybe music and video.

A million of the video game consoles have been sold in Japan in its first month of availability.

And now Sony is forming an online bank there. It's scheduled to open in the first half of 2001.

Japanese customers will be able to conduct business with the bank through their Playstation2s. Sony will encourage them to use the bank to pay for downloads of Sony products. J.P. Morgan will have a 4-percent stake in the bank.

Will Sony own an online bank in the United States someday? The folks at Sony Computer Entertainment America say they haven't heard anything.

But already, Citibank offers a Sony-branded credit card. And there's that partnership with J.P. Morgan in Japan

.

-- Posted: April 7, 2000

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