Knut R' Bjerke

1
Status of E-Billing In the Nordic Countries

• Knut R. Bjerke
• BBS

2
About BBS

• BBS is the Norwegian banks clearing house (ACH)
  and also an important provider of clearing
  services to Norwegian banks
• The business is built around 5 product areas
• Card services
• Giro and bill payment services
• Information services
• Clearing services
• Trusted services
• The company is owned by the Norwegian banks

3
Key figuresNordic countries
Norway
Sweden
Denmark
Finland
5,3 mill. 122 / km2 43.096 km2 39.300 160 2,75
mill. 4,7 mill. 2,2 mill. 34
9 mill. 20 / km2 450.000 km2 33.700 127 5,12
mill. 7,9 mill. 4,7 mill. 26
5,2 mill. 15,3 / km2 338.000 km2 31.100 94 2,65
mill. 4.7 mill. 3,0 mill 25
4,5 mill. 11,7 / km2 386.958 km2 48.400
148 2,28 mill. 4,1 mill. 2,5 mill. 30

• Population
• Pop.density
• Area
• GNP /capita (2003)
• Number of banks
• Internet users
• Mobile phones
• Internet bank customers
• Broadband connections - of number of households
  and enterprises

Source CIA Factbook 2003 and OECD
4
Payment infrastructureNordic countries
Norway
Sweden
Denmark
Finland

• Policy decisions
• Standards
• Clearing / ACH
• High value
• Mass transactions

Bankers Association PBS Bankers Associatio
n Central Bank PBS(network) Bankers Associatio
n
Bankers Association Bankers Association
Central Bank BGC /Nordea/ bilateral clearing
Bankers Association Bankers Association
Central Bank Clearing Banks
- Bankers Association - Savings Banks
Association - Joint Committee on Payment
Systems - BSK (The banks Standardization
Office) BBS BBS
5
E-billing B2C
6
P2C payments in Norway
7
Invoice
Recipt
Amount Beneficiary account number
Giro
Billers reference number
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Value networkE-billing B2C
Partners
BBS
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B2C3 types of e-billing partners Partners help
billers with e-billing integration

• Integration partners
• Tailor-made integration
• Off-the-shelf solutions for chosen segments
• ERP software vendors
• Off-the-shelf solutions for existing ERP
  software
• Bill Service Providers
• Total package (print, sorting and send out paper
  invoice
• Archiving (Invoice Hotels)
• Detail bill presentation for e-billing
• Add-on services

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E-billing B2C in Denmark

• Market
• PBS operate a central Direct Debit Scheme -
  Betalingsservice. Today 94 of all Danish
  households have BetalingsService agreements and,
  in 2003, they used BetalingsService to do 148
  million payments.
• There is no separate e-billing solution in the
  consumer market and no clearly defined solution
• Proposed solution
• EFaktura as an amendment to Betalingsservice.
  Information which is normally presented on an
  ordinary invoice will be included on the monthly
  advice sent from PBS covering bills to be paid
  during the following month.
• Other information
• Direct debit dominates the private sector in
  Denmark. There is no market for a separate
  e-billing B2C solution.

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E-billing B2C in Finland

• Market
• Present B2C market has not developed as
  anticipated. Number of billers is limited and the
  usage is rather low. Cost for these solutions is
  relatively high, so it requires a large invoice
  volume.
• During 2005 banks will extend the Finvoice
  solution from B2B also to B2C. Same technical set
  up, same agreement procedures for the billers and
  lower cost to get started. All users of B2B can
  send automatically to B2C as well.
• Solution
• Solutions are dominated by e-invoice service
  providers / consolidators and customers are
  reached through internet banks.
• Banks provide their own document hotel services
• Business model
• Several consolidators and billers could also do
  it themselves (not used though)
• Complex agreement structure as the billers need
  agreements with several banks and their
  consolidator
• Main business benefits for the consolidators
• Different options for the billers, more
  complexity to the consumers

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E-billing B2C in Norway

• Market
• One solution, eFaktura (operated by BBS), which
  nearly all banks are offering to their customers.
  
• Solution
• Bills presented through Internet banks,
  independent on the billers selection of bank or
  selection of bank for the private customer
  (everybody to everybody). Easy to add new
  services offered to billers.
• Business model
• The banks enter into a contract with billers
  and/or bill receivers
• Thin model BBS is the only consolidator and
  BBS has an agreement with all banks
• Service providers and banks delivers value added
  services to billers and banks to their private
  customers.

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Market coverage B2C in Norway
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Infrastructure e-billing B2C
BSP
Euronova
Biller A
Bill receiver A
Netbank 1
BBS
EDB IT drift
Biller B
Bill receiver B
Netbank 2
Consolidator
Enita
Biller C
Bill receiver C
Netbank 3
Payment request Agreements
Ergo Ephorma
Biller D
Bill receiver D
Netbank 4
BBS
Biller E
Bill receiver E
Netbank 5
e-billing Hotels
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E-billing B2C in Sweden

• Market
• Two solutions, now linked eFaktura and e-Giro.
  E-Giro is operated by BGC, and eFaktura by
  Postgirot (part of Nordea Bank).
• Solution
• Bill presentment through Internet banks and
  simple add on services offered to the billers.
• Business model
• BGC and Postgirot has an agreements with
  participating banks
• The banks has agreements with billers and with
  their private customers which want to use the
  service as bill receivers.
• Service providers and BGC (on behalf of the
  banks) delivers value added services to billers.

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Differences and equalities of Nordic e-billing
B2C

• Different approaches
• Denmark Building on existing central direct
  debit scheme of PBS
• Finland
• Local initiatives with low volumes. Existing
  distributed B2B solution will be extended to the
  B2C market during 2005
• NorwayOne solution, one consolidator only
• SwedenTwo solutions, two connected consolidators

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Critical success factors to succeed in the B2C
market ?
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Critical success factorsEverybody-to-everybody
infrastructure
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Critical success factorsOne consolidator only
Euronova
Biller A
Bill receiver A
Internet bank 1
BBS
EDB IT drift
Biller B
Bill receiver B
Internet bank 2
Consolidator
Enita
Biller C
Bill receiver C
Internet bank 3
Payment request Agreements
Ergo Ephorma
Biller D
Bill receiver D
Internet bank 4
BBS
Biller E
Bill receiver E
Internet bank 5
E-billing Hotels
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Critical success factorsEnrolment capturing
Dec. 5th

• Enrolment suggestion in the Internet banks
• When a user pays a bill from an EBPP biller
  manually
• From payment history
• One-click enrolment
• No need to enter user ID or EBPP reference

Enrollment capturing effect
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Critical success factorsA strong brand

• BBS responsible for brand building /strategy and
  mass communication efforts
• Providing a common
• Communication strategy
• Brand strategy
• Visual identity
• Banks and billers runs direct communication
  efforts
• Two common campaign periods each year
• Continuous marketing efforts among banks and
  billers.
• Brand recognition in Norway 80 percent

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E-billing B2B
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Electronic bill payments in Norway
Mill. transactions
150 125 100 75 50 25
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The e-billing B2B market

• Market estimate, number of bill transactions
• Billers have same requirements in B2C and B2B
  segments
• Large companies in the B2B segment have stronger
  influence
• Small companies as receivers have the same
  requirements in the B2B as private individuals in
  the B2C segment
• Large and medium sized companies have a variety
  in requirements as to level of integration and
  information

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The competitive arena for banks at the B2B market
Service providers BSP
Software distributors ERP
Banks
Corporate
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B2C, B2B and Value Added Services
Company individual Services from banks
E-Billing B2CLarge core, mediumstandard
services and few company individual services
StandardizedServices
Infrastructure
E-Billing B2BSmall core, morestandard services
andcompany individual Services from banks
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eFaktura B2BForces at play across the Nordic
region
Market players New players within printing,
distribution for example ACHs New
opportunities Software companies Increased
sophistication Workflow and ERP suppliers More
customers, Nordic offering
Invoice recipients (IR) Reduced administrate
costs Less errors STP Automated deliveries
A more dynamic market and competitive arena at
the Nordic level
Invoice issuers (II) Reduced administrative
costs Reduced of debtor days Automated
deliveries Reasonable investments
The banks Nordea, SEB, SHB, DB with Nordic market
as home market and currently investing in Nordic
solutions Large domestic banks interested in
domestic control Customer attrition Protection of
the payments business, forward integration in
value chain with new business opportunities Broade
r scope of the I-net bank
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Nordic overview
Norway
Sweden
Denmark
Finland
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Standardization

• Different focus and levels of standardization
• Addressing
• Payment requests
• Invoice details
• International banking initiatives
• ePI Addressing, payment requests
• SWIFT C2B XML Addressing, payment requests
• International initiatives
• NorStella / EDIFACT Invoice specification
• eBXML Framework for format specifications
• UN/eDocs UN/CEFACT Invoice specification
• International sector initiatives
• RosettaNet Addressing, payment requests
• National initiatives
• FINVOICE The Finnish Bank Association uses
  ePI and eBXML
• eGet Invoice specification larger billers and
  bill receivers in Norway
• OIOXML Invoice specification public
  enterprises in Denmark

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E-billing B2B in Denmark

• Market
• PBS runs a pilot project at Q2/2005 on eFaktura
  version 2, a solution for every Danish banks (in
  all, 95 percent market share)
• Solution
• Junction point between the communication of
  different formats, with the possibility for value
  added services.
• Business model
• PBS has an agreement with the banks
• The banks or PBS enters into contracts with
  billers and bill receivers.
• Service providers and PBS delivers value added
  services to billers and bill receivers.
• Additional information
• The public demand for electronic billing (OIOXML)
  is a strong motivator and guidance for the
  development of the service.

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E-billing B2B in Finland

• Market
• Banks with together more than 90 percent market
  coverage have one shared solution (Nordea, OP
  bank, Sampo at the present). The solution is
  also open to non-banks (e.g. TietoEnator,
  WM-data, Elma, Enfo, Basware, Anilinker)
• Uptake in number of customers and usage has
  started to grow clearly
• Solution
• Network oriented. Uses FINVOICE (controlled by
  the the Finnish Bankers Association) as a
  standard exchange format between participating
  banks and other Service Providers.
• Supported widely by the software vendors less
  need for consolidator services.
• Business model
• Bilateral agreements between Service Providers.
  These make agreements with billers and/or bill
  receivers. Service Provider or software vendors
  deliver value added services to billers and bill
  receivers.
• Additional information
• TIEKE (Finnish Information Society Development
  Centre) operates with an open catalogue service,
  containing the address to billers and bill
  receivers.
• Home page of Finnish Bankers Associaton
• http//www.pankkiyhdistys.fi/finvoice/

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E-billing B2B in Norway

• The banks agree that a national solution must
• utilize/re-use the position the banks have in the
  market through the existing e-billing B2C
• be able to connect other solutions in the nordic
  region and also other international B2B networks
• be based on joint principles and guidlines
• agreement on business model and standards
  controlled by banks.
• supported from the beginning from a majority of
  banks.
• Decision this month implementation Q3

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Competitive services Bank X
Other banks
Bank X
Bank Y
Customer
Services
Customer
Customer front
Services
Customer front
BillerB2C
Shared solution B2C / B2B click and pay
Bill receiver click and pay
Internet bank
BillerB2B and B2B/B2C
Shared solution B2B
Bill receiverfile transfer / click and pay
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E-billing B2B in Sweden

• Market
• BGC runs a pilot project in Q1-Q2, 2005 with a
  solution for SEB, Handelsbanken and Danske Bank
  (in all, 65 market share)
• Solution
• Junction point between the communication of
  different formats, with the possibility for value
  added services.
• Business model
• BGC has an agreement with the banks
• Banks enter into contract with billers and/or
  bill receivers
• Service providers and BGC (on behalf of the
  banks) are delivering value added services to
  billers and bill receivers.
• Additional information
• The solution is built upon the technology of
  e-giro solution belonging to BGC, but is not yet
  connected.

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eFaktura B2BThe current situation in the Nordic
region

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NorwayPossible B2B scenario
DnB NOR
Danske Bank
SpareBank1
Handelsb.
Banks
Finland
Terra
SEB
BBS
BBS
Norway
eFaktura B2B
BBS
BBS
BSPs
eFaktura B2C
BGC
Nordea
Sweden
Dansk
SEB
BGC
All banks
Denmark
PBS
Handelsb.
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NorwayPossible B2B scenario (2)
Banks
Finland
DnB NOR
SpB1
BBS
Norway
Terra
DB
BSPs
SEB
BGC
SHB
Sweden
DB
SEB
BGC
All banks
Denmark
PBS
SHB
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Questions ?