While many consumers have been using computers to track their finances for years, the actual process of sending and transmitting bills and tax returns is still decidedly low tech. However, Intuit Inc. is looking to change that.
The company, whose Quicken personal finance and Turbo Tax packages are the market leaders, is betting the Internet will continue to fuel innovation in bill payment and tax filing.
Intuit Chairman William Harris said the hurdle is the classic chicken and egg problem. Consumers won’t embrace electronic bill payment until more companies are set up to handle them.
“A system is being developed so multiple players can provide a multitude of bill deliveries and payments. The problem is how to get billers to come without consumers on the system and vice versa. At Intuit, we’re focused on the consumer side and have said let’s prepare the recepticle for consumers,” he said.
Harris said Quicken ’98 and ’99 already allow consumers to receive bills electronically. However, the number of companies willing to convert to electronic billing has yet to reach the critical mass necessary for consumers to embrace the transition.
“It sounds mundane, but the average household gets between 15 and 20 bills a month. This can all be reduced to one click.”
Research firm PSI Global predicts that the number of companies with the capability of electronically billing their customers will climb from 6 percent currently to about 36 percent by the year 2000. The reason for the rapid change, Harris said, is electronic billing gives companies the opportunity to save huge amounts of money.
“The top 50 billers will save $8 billion annually by 2001. Sending paper bills costs between 60 cents and $1.40. The cost drops to 50 cents or less when done electronically. However, if it doesn’t ultimately make the customers life easier or allow them to save money, an electronic billing network will never get off the ground.”
The Internet also stands to revolutionize tax filing, an area where Intuit also dominates. Although consumers won’t see as much of a benefit, Harris said moving getting rid of paper in the system stands to save business lots of money. Small businesses, he said, are increasingly caught in a paper chase when handling payroll and making tax payments.
He said more than $2 billion in IRS fines were levied on small businesses for miscalculating payroll taxes, yet 86 percent still handle the process manually. With conventional paper filing, error rates are close to 20 percent, although that figure plunges to around 1 percent when done electronically.
“The next step is not only to use the Internet for connectivity, but to put transactions on the Web. Already today you can go to a Web site, fill out all your tax information and finish the process with no forms.”