What Is Bill Presentment?

Bill presentment refers to a set of instructions that directs a third party (e.g., a customer) to pay the recipient a specified amount of money. Bill presentment, simply put, is when a service provider bills a customer and demands payment. This can be in paper form or done electronically.

Key Takeaways

  • Bill presentment is an instruction for a third party to pay a specified sum to the recipient in return for services rendered.
  • Traditionally, this has relied on mailing paper bills and accepting payment by mail in return.
  • Electronic bill presentment and payment (EBPP) has essentially replaced paper-based bill presentment.
  • EBPP improves customer service and streamlines the reconciliation process.

Understanding Bill Presentment

Bill presentment represents a financial claim along with instructions to carry out the payment. Bill presentment is often used by vendors such as utilities (e.g. phone companies, electricity & gas providers), lenders, insurers, and other service companies to demand payment by check or credit card, or else directly from their customers' bank accounts.

Bill presentment involves generating an invoice (i.e., a bill) and sending it to the customer for payment. In the past, this was done via paper bills sent and returned through the mail. Today, a large amount of bill presentment has moved online. Bills generally must be paid in a timely fashion, with a due date printed on the bill itself. Late fees or surcharges may be added if payment of the bill is delinquent.

Change of Address

Bill presentment relies upon being able to deliver the bill to the customer. A change of address section is usually included on a bill to notify the service provider and inform them where to send future bills.

Electronic Bill Presentment and Payment (EBPP)

Electronic bill presentment and payment (EBPP) is an online system that allows invoices to be created, processed, and paid over the internet, and has functionally replaced paper-based bill presentment. EBPP services are a core feature of online banking, allowing customers to pay their mortgages, insurance, utilities, and other bills online directly from their bank account at regular intervals or on a specified date or dates.

EBPP has been widely adopted in business-to-business (B2B) eCommerce because it saves on postage fees and transaction processing costs, and it can be used in cash management systems and on mobile devices. EBPP improves customer service and streamlines the reconciliation process, as well as enables customers to pay faster, which also improves cash flows. It is also increasingly popular for business-to-consumer (B2C) payments.

Take Advantage of the Latest Features

Many banks today now provide automatic bill pay services, which can be set up on their websites or mobile apps. These bill payments may be done electronically or through the generation of a paper bank check mailed to the recipient. Some newer EBPP products also include security features like encrypted or password-protected email delivery, stored payment data, two-factor authentication (2FA), and autopay.