lectronic bill presentment and payment (EBPP) is one of those modern conveniences that just doesn't seem to catch on. Sure, a fair share of Americans are viewing and even paying bills online. TowerGroup, a Needham, Mass.-based research and consulting group, estimates 20% of American consumers are looking at their bills online these days. A report released by TowerGroup in December suggests consumers who pay bills online do so for an average of 3.7 bills a month (which translates to about one-third of the average household's average monthly bill-paying activity).

Bank of America, meanwhile, said in October that it had convinced 1.5 million customers to use its online bill-paying service - a 50% increase in six months after dropping monthly charges for the service, according to published reports.

Many observers think B of A is on the right track - the touted savings and budgeting advantages of e-billing and payment are simply insufficient to warrant the fees that are being charged for these services. I concur but would add that there are other stumbling blocks to widespread adoption of this orphan child of the electronic payment revolution.

Consider, for example, that most of the electronic processes in e-billing and payment end with the consumer's initiation of a payment request. Some consumers are learning this the hard way, with billers assessing late fees on payments those consumers had assumed were timely since they had initiated the payment requests in advance of the due dates. Consumers like my friend Susan.

Susan is a financially savvy professional. She manages a tech shop at a large financial services organization, earns a good salary and is not averse to adopting new ideas. So when her bank began offering online bill payment, Susan says she saw it as an opportunity to simplify budgeting and her bill paying.

Being a "techie" and savvy, Susan understood that her online payment instructions weren't going to result in instantaneous payments. What she didn't understand is that the back-end processes that supported her bank's online bill-pay service were nearly as slow as the U.S. Postal Service's traditional "snail mail" service. The upshot: Her next bill from the electric company included a late-fee assessment for the previous month's payment.

"I initiated the payment with plenty of time to spare," Susan complained. Apparently not.

For as long as I can remember, bankers and billers alike have talked fervently of the need to eliminate the paper shuffle inherent in bill presentment and payment. But when it comes to implementation, strategies have been lacking. Instead of using the electronic payment systems they've built (such as the automated clearing house, or ACH) to clear and settle customers' online bill payments, most banks and other bill-pay service providers effect bill payments on behalf of their online customers using a process known as "check and list."

In other words, all payments earmarked for a particular biller (e.g., Baltimore Gas & Electricity) are bundled together; a check for the total is cut and a list of paying customers (with corresponding invoice/account numbers and payment details) is handed off to the biller. The biller then has to reconcile that list with its customer bills and apply payments on an account-by-account basis - a process that can take days to complete.

What makes this practice seem even less appealing is that often the biller's bank and a customer's bank are one and the same, but there is really no way of effecting bill payments electronically in the bank's back shop because corporate and consumer banking systems aren't integrated. Instead of electronic debits and credits being initiated in-house, the consumer's account is debited and a check is cut and sent to the biller, which then must reconcile and clear the payment back through the same bank.

Is it any wonder, then, that consumers continue to prefer writing checks to pay their bills? According to TowerGroup, check writing remains in vogue even among online consumers. The firm reports that 41% of online banking customers still write checks and place them in the mail for bill-payment purposes; the same goes for 26% of households using Internet bill-payment services. It's a situation that bodes poorly for banks and non-banks alike.

Billserv, Inc., a third-party provider (outsourcer) of e-billing and payment services to companies, has been threatened with delisting from the NASDAQ national market because its stock has been trading so low - at less than $1 a share since fall. (In mid-January, Billserv was trading at about 21 cents a share.) Billserv counts more than 100 corporate billers as customers, including the student-loan company Sallie Mae and Time Warner Cable.

Spectrum, an e-billing and payment service launched in 1999 by three big banks - J.P. Morgan Chase, Wachovia and Wells Fargo - was sold last year to Metavante (the outsourcing arm of Marshall & Ilsley Corp., a Milwaukee-based banking concern), which counts many small and midsize community banks as clients.

The founding banks said they couldn't make a go of it; Metavante is packaging Spectrum with existing services to offer end-to-end e-billing and payment through its client banks.

Late last year, BillingZone, a corporate-focused e-biller set-up by PNC Bank, Pittsburgh, and Perot Systems, was sold to First Data Corp., which has folded the firm into its emerging payments unit, eONE Global. Raj Kushwaha, Managing Director and CTO of eONE Global, says the "combination of BillingZone's services and First Data's existing paper document and check-handling capabilities [will] create the most comprehensive offering available to large companies for automating both paper and electronic financial supply chain transactions."

The operative word here is "comprehensive." Americans need (want) comprehensive, end-to-end electronic services for bill presentment and payment. They want (deserve) an online solution that's at least as close to real time as ATMs or POS card terminals are.

Oh, and by the way, consumers don't want to pay much more than the perceived value of online bill paying, which these days works out to about $4.44 (the cost of stamps for an average household's monthly bills).

Patti Murphy is Contributing Editor of The Green Sheet and President of Takoma Group. She can be reached at patti@greensheet.com