UPS to deliver online bill payment

Through its new service, UPS will help control the flow of money between buyers and sellers. Businesses will pay for goods electronically but prior to payment, buyers can track the status of their goods, and based on that information, adjust the amount of payment. For instance, a company buying merchandise that is delivered damaged could contact UPS to withhold a percentage of the payment.

"There is so much money to be saved through electronic bill payment that the company that facilitates that savings stands to be in a good position to earn some of that money themselves," said James Van Dyke, Jupiter Communications senior analyst. "The technology is there, just nobody so far is using it."

UPS is offering electronic bill presentment and payment services (EBPP) to businesses through its wholly owned financial services arm, UPS Capital. The company said it enlisted the help of bill-payment firms Bottomline Technologies and Princeton eCom to ramp up the new offerings.

"UPS Capital is reversing the conventional EBPP model that focuses only on the biller, by developing a product that focuses equally on the biller and payer," said UPS Capital president Bob Bernabucci. "The key to triggering bill payment, after all, is proof that the goods arrived."

This is the latest e-commerce play by the Atlanta-based firm, which charged into e-business following its record-setting initial public offering last November, when it raised $5.47 billion, the most ever raised in an IPO in the United States.

Because studies showed UPS was the shipping company that carried most of the products purchased online, analysts said it was uniquely positioned to become a Net power.

Since then, UPS has become like a Web octopus, growing tentacles in a slew of different e-business sectors. It now provides an electronic-document delivery service, consults Web firms on logistical problems associated with home delivery and helps companies such as Ford track their products.

Despite UPS' strong Internet offensive, it has faced challenges by a multitude of competitors. In the delivery sector, old foes such as Federal Express and Airborne Express have ratcheted up their Net offerings, while new entries to the delivery sector have arrived in the form of various online merchants.

Online grocers such as Webvan and HomeGrocer and Internet convenience stores like Kozmo.com and Urbanfetch.com not only carry their own products to customers' doors but are all planning to deliver products of other e-tailers as well.

And while UPS is focusing on the business-to-business market with its payment and presentment plan, a crop of companies, including PayPal.com, PayMyBills.com and eMoneyMail.com, have moved into the EBPP sector and could offer similar business-to-business services.