Paperless billing: who benefits?


PAPERLESS BILLING:E-billing is being sold as the solve-all cure for our modern ills – save time! Save the environment! But who’s really making the savings? Because if big companies are backing the move, it’s probably not you

WE ARE SUPPOSED to be living in a paperless world, where trees sleep soundly at night – safe in the knowledge that they will not face the chop in the morning in order to supply endless reams to businesses so they can tell us how much we owe them (on a monthly basis).

While the digital revolution has delivered much of what it promised 15 years ago – and then some – the disappearance of the paper bill has yet to materialise, although it is coming closer. The State’s two biggest network providers O2 and Vodafone who, between them, post more than three million paper bills each month, are fast moving towards their ultimate goal of an exclusively e-bill setup.

The concept makes a great deal of sense on many levels, but it became embroiled in controversy late last month when it emerged that the telecommunications regulator ComReg had rapped O2 on the knuckles and accused it of violating the terms of its licence by switching customers to online billing without their explicit agreement.

It was given a month to “remedy its non-compliance” and threatened with a High Court action if it failed to do so. The row started in August when O2 wrote a jaunty letter to its billpay customers wherein it was written: “If it’s okay with you, your next bill will be online instead of in the post.”

While it may have been okay with customers, it was not okay with the regulator or with consumer groups. ComReg said that, although the letter did include guidelines on how to opt out of e-billing, online bills were only permitted where “positive consumer consent” was obtained. It stressed that a paper bill would be have to be provided as standard in the absence of that consent.

It accepted that companies were keen to switch to e-billing because of the potential cost benefits as well as environmental benefits but said that “as previously set out, ComReg is of the view that any move to e-billing should take full account of, and safeguard, the legitimate preferences and interests of consumers and comply fully with licence and other applicable legal requirements.”

The Consumers’ Association of Ireland (CAI) described the move by O2 as unprecedented as it forced customers to opt out of the change, rather than opting in. CAI chairman James Doorley said people were “more likely to check their bills if they get them in the post”. In response, O2 said that over 70 per cent of its post-paid customers had switched to getting their bills online while the remainder had told the company they wanted to continue receiving paper bills in the post. In a statement, it said it was “in full compliance with its regulatory obligations and will respond to ComReg accordingly, highlighting the very positive consumer reaction to its initiative”.

ComReg has now launched a month-long consultation process on online billing and has asked all stakeholders to air their views on the issue. We launched our own, social media-based consultation on the e-bill issue last week. Opinion was fairly evenly split between those who were enthusiastic about the changes and those who were more reluctant.

“It’s okay for those who have access and ability to use a computer – not everyone does though,“ said Louise Embling. Another response, from Niamh Byrne, made the point that moves to online billing were good for businesses, but not so good for consumers. She said: “Unless my bills are really unreasonable, I rarely check it the way I’d have checked a paper bill.”

Gerard O’Reilly said it was “the way forward” and described as “annoying” hard copies of bank statements “when an e-mail would suffice”.

For her part, Orla Barry said it made “perfect sense”, except for the fact that people “never remember to pay because there’s no threatening-looking letter there!”

“It’s great – until you need proof of address for the Department of Social Welfare,” said another reader, Jim Kennedy, while Denis Maguire pointed out that it was “a good thing if the reduction in cost to the billing company is passed on to the consumer and done primarily for environmental reasons”.

Maguire’s point is right on the money. Companies – not just O2 – make a point of claiming they are motivated by environmental concerns when they want to switch to e-billing, but the reality is they are switching to online billing to make massive savings – savings that are rarely, if ever, passed on to consumers in the shape of lower tariffs.

In the UK it is common practice for companies to offer inducements such as discounts and upgrades to customers who switch to e-billing. In Ireland, companies are more likely to penalise those who don’t switch by slapping ridiculous tariffs on to the paper bill. Vodafone, for example, is charging new customers €2 if they opt to get paper bills.

Possibly the biggest loser when it comes to paperless bills is not the consumer, but An Post. While it has seen its parcel delivery business boom thanks to the growth of online shopping, the internet is also its biggest threat.

An Post’s regular post business will take a hit if – and when – e-billing gains serious traction. Big companies such as O2, Vodafone or Eircom send out around one million bills each month and pay around 25 cent in postage for each letter sent (the regular cost of sending a letter is 55 cent, but they benefit from substantial bulk discounts). The annual cost of sending bills quickly reaches €3 million – and that is before the cost of the paper is factored in.

“There are undoubtedly serious implications for our business by a switch to paperless billing,” says An Post spokeswoman Anna McHugh. “Customers signed contracts with these companies, and part of their agreements included paper bills. They have the right to choose online billing if it is available, but when it is forced upon them by a company, that company is in breach of the original agreement.”

She also claims companies will find it much more difficult to market products and keep customers informed if they drop paper bills. “Very few companies simply send out paper bills on their own. The bills also come with promotional material that can be used to hook and retain customers.” While she makes an impassioned case for the humble letter, it does seem as if she’s trying to hold back the tide.

Dermot Kirwan of Friends of the Elderly is also concerned about the relentless march toward paperless billing. He says the reality is that the vast majority of older people do not have access to computers and don’t have any need for computers. He says that moving billing and booking into an exclusively online domain puts bright, able people in a position where they have to call round to neighbours or into places such as Friends of the Elderly to get access to vital information.

McHugh echoes Kirwan’s concerns and highlights the problems a widespread move to online billing would have for the disconnected many – over one-third of Irish households do not have access to broadband. But, in general terms, she claims to be unconvinced e-bills are what people actually want. “Our research consistently shows that people like and want to get paper bills.” We’re tempted to paraphrase Mandy Rice-Davies here: “Well, she would say that, wouldn’t she.”