Issue 4

The BPAY service continues to grow with more than 16,000 companies offering the bill payment option. Among these businesses, there are a number of Master Billers who act on behalf of Sub Billers, enabling smaller companies to offer the BPAY service. Currently there are 73 Master Billers and 20,055 Sub Billers.

The Master Biller-Sub Biller arrangement is particularly applicable to industries that are typically populated by sole operators or franchisees, such as travel agents and real estate agents. It is also an effective agreement for companies that have frequent payments from many sources, such as strata and rental companies. A number of not-for-profit organisations also prefer this arrangement, as do some schools and universities.

The Master Biller-Sub Biller partnership has benefits for both parties. For small businesses that become Sub Billers, featuring the BPAY logo on their invoices equates to increased cash flow and faster payments (no dishonours, charge backs or returns and receipts are cleared funds), along with accurate payment records. It puts to rest the infamous phrase "the cheque is in the mail".

Additionally, for a smaller company that may not yet have the transaction volume required to become a BPAY biller, this arrangement enables them to offer their customers the BPAY option while building up their base of transactions.

In terms of the costs involved, the Master Biller provides billing services to a smaller company for a fee, which is generally very competitive with what the small company would pay for a similar service.

While many small operators remain in the Master Biller-Sub Biller arrangement over a long period, some decide, after becoming more familiar with the BPAY service and its benefits to become a regular BPAY biller.

If any BPAY biller is interested in receiving more specific information on the Master Biller-Sub Biller agreement, please contact the BPAY office (02) 8252 0500 or your financial institution.

In mid 2008, we highlighted several reviews that were taking place in the regulatory arena. Here in Part Two, we provide the latest update:

Reserve Bank of Australia

Review of Payments System Reforms: In September 2008, the RBA Payment Systems Board announced the findings of its 2007/2008 review, which indicated that the RBA was not persuaded to remove regulation of interchange fees.

The RBA stated that they will continue to monitor industry development until August 2009. If, during that timeframe, insufficient progress has been made in addressing its concerns over strengthening the competitive environment, then regulation of interchange fees will continue.

The Review made a general comment regarding the RBA's concern over a lack of innovation in the payments system; however, no specific mention of BPAY or BPAY transactions was made.

ASIC

Review of the EFT Code of Conduct: A Review containing a number of proposals was released by ASIC on 3 October 2008. ASIC has not yet formed a view on the inclusion of a Mistaken Payments Regime in the Code (the main thrust of the BPAY submission) and the extension to small business. Elements of the ASIC proposals include that BPAY transactions will be explicitly named as subject to the Code.

Australian Law Reform Commission

Privacy: The final Australian Law Reform Commission Report was released on 11 August 2008. The Government's response to the Report will most likely appear directly in legislation to override all State and Territory laws. The draft legislation is expected to be available in 2009.

The legislation will most likely introduce a set of Unified Privacy Principles to replace the National Privacy Principles (private sector) and the Information Privacy Principles (public sector). The new legislation is likely to change some of an organisation's obligations and also to give the Privacy Commissioner enhanced powers of enforcement.

For the past eight years, the Australian Taxation Office (ATO) has offered BPAY as a method of payment to both individuals and business operators. Within that time, this bill payment service has become the ATO's preferred method of payment, accounting for more than 39 per cent of all payments received by the Tax Office in the 07-08 financial year.

Recently BPAY and the ATO collaborated on a joint marketing campaign targeting sole operators and small business owners. The BPAY proposition of ease and convenience is particularly significant to these entrepreneurs, who are typically time-starved and more focused on the income earning aspects of their business.

The tactical timing of the activity centred on quarterly BAS payments due on October 28. Ten-second radio spots on the Australian Traffic Network in metro New South Wales, metro Queensland and metro Victoria, aired throughout the third week of October. Supporting the radio effort, an electronic direct mail was distributed on the 21st October to 31,000 small business owners.

The message across all media was a straight forward communication reinforcing BPAY's simplicity in meeting tax and GST obligations, encouraging small business operators to try this bill payment service.

Post-campaign analysis shows that BPAY payments to the ATO in October 2008 increased by 14 per cent compared to the same month last year.

This campaign serves as only one example of effective joint marketing activity that BPAY has undertaken with a biller. Other activities that billers can undertake include creating direct mail pieces, website banners, statement inserts, on hold messages, call centre activity, envelope messages and bill messages.

If a BPAY biller is interested in learning more about developing joint marketing activity, please contact BPAY marketing office via email: marketing@bpay.com.au.

While not a new phenomenon, the current sophistication of mobile phones continues to influence not only how we communicate, but also how we conduct our lives. Talking 'on-the-go' has evolved to include the consumption of information and immediate access to personal data ? all via a phone that fits into the palm of our hand.

With an estimated three billion mobile phone users worldwide by 2011 (Frost and Sullivan 2007).

It is predicted that mobile banking will be used by an estimated 35 per cent of online banking households by 2010, with Gen Y adopting the technology faster than any other demographic (US Mobile Banking: Beyond the Buzz). This report also states that 40 per cent of 18 to 25-year olds will be influenced by mobile banking features when choosing a financial institution.

More immediately, the immensely successful global launch of the iPhone has highlighted the speed at which consumers are willing to accept mobile technology ? placing Internet banking in the spotlight more than ever before.

For the first time, financial institutions, particularly retail banks, are introducing mobile banking as a part of their mainstream customer service proposition. For example, ANZ's customised iPhone icon takes the user directly to the login page for ANZ Internet Banking, which allows its customers to view their accounts and 30 day transaction history, transfer between accounts and pay anyone.

Westpac recently made modifications to its online banking site, ensuring its compatibility with iPhone's web browser. Westpac customers are able to bookmark the Westpac Internet Banking site on their phone.

CommSec also launched a customised iPhone application, encouraging customers to manage their investments via the mobile phone's easy touch-screen functionality.

But what does this all mean for Australian businesses? Ultimately, consumers will be more inclined to interact with those companies that ardently employ channels that best suit their lifestyle. And increasingly it is a lifestyle characterised by customised technology..

As reported in the previous issue of News & Views, BPAY's latest national advertising campaign, entitled 'Virtually Anything', ran in the media from July to September 2008.

The campaign's quirky and colourful images, featured in newspapers, magazines, on outdoor media and online, address the broad range of payments that can be made via BPAY.

In evaluating its success, one measurement is based on reaching a 'stretch' marketing target of one million payments over and above the Scheme forecast, measured over six months. Impressively, this campaign captured an additional 220,000 payments beyond the stretch target in the first three months.

Additionally, marketing research expert, TNS, conducted a post-campaign study that indicated 45 per cent of the respondents understood that the images communicated the key message of 'Virtually Anything'.

The study also demonstrated a clear call-to-action, with 27 per cent of people surveyed having used BPAY for a new payment since seeing the campaign.

Interestingly, this campaign was particularly persuasive with the youth demographic: 79 per cent of 16-17 year olds, and 77 per cent of 18?24 year olds indicated a positive response to the campaign, compared to 57 per cent of overall respondents. Also, 70 per cent of 16?17 year olds have a better opinion of BPAY after seeing the campaign, compared to 39 per cent of overall respondents.

In addition to traditional media, the images were also used by billers in statement inserts. If a Member is interested in participating in a future media campaign, please contact the BPAY marketing department at marketing@bpay.com.au.

Launched in 2002, the BPAY View service supports e-presentation for 40 billers. Customers can access the BPAY View service via their online banking platform and can register to receive their bills and statements from any of these billers electronically rather than via mail.

Companies that have gone 'live' recently include Riteway Transport, TNT Australia and ANZ.

ANZ uses the BPAY View functionality for the e-presentment of its statements - which marks the first time a biller has used the BPAY View service as a channel for electronic document delivery rather than electronically sending a bill for payment.

The uptake by ANZ customers has been considerable, with approximately 40,000 e-presentations in the first three months of offering BPAY View.

As the ANZ example illustrates, the BPAY View system is designed to allow companies to not only present bills, but transmit any type of information including statements, end of year tax summaries and reminder notices. In addition to the administrative efficiency of e-commerce, BPAY View is an enabler of better environmental outcomes, saving paper, ink and postage.

If any biller is interested in learning more about how BPAY View facilitates e-communications, please contact BPAY on (02) 8252 0500.

The BPAY Validation Rules provide billers with a flexible method to ensure that their customers correctly enter their BPAY Customer Reference Number (CRN) at time of payment.

Validation Rules work in tandem with other CRN Validations, such as the check digit routine and CRN length, to provide additional data reliability at time of entry.

Essentially, the Validation Rules perform additional checks on the CRN at time of entry to ensure that the CRN is accurate. The following examples illustrate how billers can apply the Validation Rules, ultimately simplifying the reconciliation process upon receipt of the BPAY payment details.

• A biller who prefers to fix a particular part of their CRN to be one or more digits can do so with a Validation Rule. For instance, the first and second digits of the CRN can only be 56 or 66, which is authenticated using a Validation Rule.
• A biller who has multiple billing systems that generate numerous CRNs with different check digits who prefers to have only one biller code can use Validation Rules to perform this confirmation. For example a biller may want all CRNs with a length of seven digits to use a MOD10V01 check digit routine, and all those with a length of eight digits to use a MOD10V05 check digit routine.

There are many other scenarios that can be supported by Validation Rules. Any biller wishing to utilise an existing Validation Rule or set up a new rule should contact their financial institution.

With the end of the year near, we would like to take this opportunity to thank all our BPAY Businesses for helping to make 2008 a productive year. We look forward to collaborating again in 2009. Happy holidays!