1. eBILLING FOR UTILITIES Solving the adoption challenges of electronic bill presentment and payment Delivery & Payment of Bills via Secure Email Presented by : Garin Toren Chief Operating Officer Case Study

2. Agenda eBilling Adoption Challenges eMail Bill Presentment & Payment NSTAR Case Study Payment & Demos

3. EBPP adoption Utility EBPP adoption figures between 2% and 11% Yet 73% of Americans are actively using email. (Neilson) The major barriers to EBPP adoption are: –The need for the customer to ‘do’ something. I.E.: register –Slow connections (dialup) make online EBPP a challenge. –Many customers have security fears around online transactions –A large percentage of customers are not web ‘savvy’. (Especially the older customer segments) –96% of customer’s time spent connected to the Internet, is in their INBOX. (Jupiter) Email EBPP eliminates all of these barriers

4. Bill Presentment & Payment via Secure eMail. Use encryption & advanced messaging technology to deliver bills, statements, invoices, pay-stubs via secure EMAIL instead of paper and postage. This enables Banks & Billers to: –Deliver secure electronic documents by email. –Enable payment linking directly from document. –Provide consolidated account bills on multiple levels. –Provide navigable billing reports and customer self-service functionality within a secure email.

5. EBPP Adoption Bill Presentment and Payment strategies drive significant customer adoption: 1.Remove the need for the customer to register 2.Deliver the statement directly into the customer’s inbox 3.New customers ~ never send paper at all 4.Existing customers ~ encourage paper truncation 1.Opt-out (strongly recommended) 2.Opt-in 5.Personalize all aspects of the bill & associated marketing material 6.Leverage direct customer service functionality 7.Take payment instantly

6. Driving adoption Adoption: –New customers: NO paper ever: 20% to 30% of your total base in 12 months? –Existing customers: Contact centre: 25% of your total base in 12 months? Website Bill stuffers Incentives ~ SMS email address Churn: –Total customers with email – 75% to 80% –Undeliverable email addresses: 8% to 12% Paper bill Email clean –Paper requests (opt-out): 2% to 7%

7. The goals of an eMail EBPP Project: Maximum customer adoption: –Total customer base: 10 to 20% in 24 months –New customers: 30% –Existing customers: 10% Over 60% paper truncation on adopted customers Over 60% electronic payment on adopted customers Reduced DSO Other: –Reduced billing call centre enquiries –Updated customer information –Increased web self service

8. EBPP via eMail is not new, its just new in North America

9. Gartner Research - 2004

10. Research 2004 / 2005 Gartner believes that, by 2006, “e-mail will become the dominant delivery mechanism for e-bills, as more consumers discover the convenience of the e-mail box as an e-bill aggregator (0.7 probability)” Avivah Litan, Research VP, Information Security & Risk, Gartner, Jan 2004 "There are several advantages to a corporation in “pushing” sensitive information to a customer rather than having them go pull the information, and one of the biggest advantages is that's the preference of the customer.” Avivah Litan, Research VP, Information Security & Risk, Gartner, Jan 2004 “It is imperative that billers maximize cost saving opportunities. Vendors like Striata are allowing for bill payment directly from within email, limiting the involvement of banks, but also eliminating the need for the consumer to visit a website to pay a bill. This “push” of (email) bills to consumers allows for expanded self-service, and hence reduced call center volume, as well as outstanding bills being paid more quickly.” Bruce Cundiff, Lead Analyst, Jupiter Research, Jan 2005

11. Excerpt from a 2003 TowerGroup Report

12. Case Study – NSTAR Gas & Electric NSTAR, a major electric utility in New England, recently undertook a pilot initiative to deliver its electric bills to residential customers via secure email, and to introduce a revolutionary new ability to take check payment directly from within the email bill. This case study covers: –The nature of the pilot project –Samples of the secure email bills –The payment solution incorporated –Results to date of the pilot project

13. Pilot Details: Small pilot group –1 letter with the bill –5% adoption (10 days) Opt-in web page registration –Account number –Email address Automatic paper truncation 31 bill variations Zip code challenge ACH check payment functionality

14. Pilot Objectives: To test and prove that required formats can be delivered - HTML To measure the speed of delivery To test select pilot customers responses To refine the data delivery process To refine the unsubscribe process To gain internal business approval To fully close the in-email payment process and test customer acceptance and usage of this payment option

15. The Payment Solution Check payment directly from within the eMail Bill No pre-registration 1 click payment Confirmation screen 2 confirmation emails

16. Results: Less than 9% unsubscription –Therefore over 90% successful paper truncation Successful payments – majority of recipients Over 98% email deliverability Customer survey: (via email) –22% survey response in 4 days –77% “Overall, how would you rate NSTAR's Email Bill? “ – Good & Excellent –78% “The bill was easy to pay” Yes –92% “Would you like NSTAR to offer Email Bill on a permanent basis?” Yes

17. Payment results: Ave Days to Payment: 7.8 Same Day Payments: 19% % <10 days till payment:68% % >10 days till payment:32% With almost 70% paying in less than 10 days and a whopping 20% paying on the same day of receipt, this has to have an incredible impact on cash flow, in particular days receivables. Basically, the vast majority (over 50%) have to be paying this bill before the paper could even hit their mail box.

18. Actual customer feedback: “Excellent idea - I wish you offered permanently! Bring it back!” “Nor receiving a paper statement is the best way to do things. People do not want to have a paper statement.” “It is more convenient and I am less likely to lose the bill and not pay on time” “I don't want to go back to paper. Please continue.” “Your pay service was excellent. Very convenient and easy to navigate! I hope you continue with this service” I hate all the paper bills I get. I would much rather get the email bill.” “This program is a great way to save time and paper. Hope you bring it back.” “Please keep this active!!!” “Loved Email Bill. It was quick and easy. I'm disappointed to see it end.” “Very practical, user friendly, good idea. Being in Massachusetts or in Florida, don't matter anymore. My electric bill is always at my finger tips.” “Email Bill worked fine for me. I work nights and paying by email bill was great. Instead of taking my lunch hour to run to the post office I can just send my payment through email bill paying system.”

19. NSTAR Demo Double click on the secure HTML attachment to view the eBill Email is digitally signed to authenticate the sender

20. NSTAR Demo Enter password Marketing opportunity

21. NSTAR Demo Billing information Link to online copy of back page of bill Payment from within the email just 1 click required

22. NSTAR Demo Online, full back page details as per the printed bill

23. Payment Options & Demos Paying the secure email bill can be achieved through three different options: –Payment directly from within the email. –Secure linking to an Internet payments page. –Secure linking to the billers online bill pay.

24. AMEX Demo Double click on the secure HTML attachment to view the eBill Email is digitally signed to authenticate the sender

25. AMEX Demo Enter login details Marketing opportunity

26. AMEX Demo Billing information Link to online version of back page of bill and a form to update details Payment from within the email just 1 click required Online link to CSV bill data download

27. AMEX Demo Online version of full back page details as per the printed bill Online self service form to update details

28. Your own eMail Billing Pilot Choose a customer segment whose email addresses you already have Start gathering email addresses across all customer touch points Send introductory email Choose ‘Opt-out’ vs. ‘Opt-in’ Send secure eMail Bill with the paper bill Truncate everybody who opens the eMail Bill Track the measures carefully