Doxo Inc. steadily has been adding new businesses to its bill-payment website, but the electronic-payments provider figures to accelerate the pace with software that enables consumers to receive and pay bills through their smartphones.

Doxo is offering Doxo Mobile for Google Inc. Android handsets and Apple Inc. iPhones, the Seattle-based company announced June 1. The software includes doxoPAY, which enables users to receive and pay bills with one account and one password.

The new software expands the doxoPAY capabilities to a mobile phone, whereas users previously could pay bills electronically online only through the Doxo website, Doxo CEO Steve Shivers tells PaymentsSource.

Doxo is counting on the new application to push more interest in doxoPAY for consumers and businesses by reducing paper billing and cutting costs, Shivers says.

“Electronic payments is growing, but consumers still rely on stacks of paper bills next to the computer at home,” Shivers says. “That’s just counterproductive, especially when 85% of consumers still get paper bills in the mail.”

However, a business undertaking a paperless initiative may see costs increase if the consumer using electronic-payments opts for an automatic-payment setup to pay bills using a credit card instead of directly from a bank account using the automated clearinghouse system, Shivers contends.

Shivers estimates it costs a company about $7.80 per year to mail bills to each customer. But when a customer pays automatically through a credit card, the card fees end up costing the business about $16 annually per customer, he adds.

“It results in about $8.43 per customer per year, after subtracting the savings on paper,” Shivers said. “When two-thirds of your customers are paying with credit cards, the costs skyrocket.”

Doxo solves that problem, he suggests. “There is no credit card payment option with Doxo, as all payments are linked to a bank account,” Shivers says.

Because Doxo users can’t link the account to a credit card, Shivers admits the payment setup would not work for a consumer who lacks funds in the bank and keeps running up credit card debt to pay bills.

“We’re trying to address that problem somehow in the future [with other options], but it’s just in the talking stages,” he adds.

Still, Doxo’s bill payment and the digital file cabinet capabilities make paying bills and managing documents easier for the consumer, Shivers says.

Doxo also saves businesses money because, on average, its users tend to pay bills 10 days sooner than the 28 days it normally takes someone on average to pay a bill by mail, Shivers notes.

“That represents a huge savings for businesses because they are not sending out second bills or making follow-up calls to the customer to remind them of a late payment,” Shivers says.

Doxo received a major boost for its e-payments service late last year when AT&T Inc. signed on as a biller offering its customers doxoPAY as a bill-issuing and payments option on the doxo.com website (see story).

Since last fall, Doxo has added 100 billers to the service, Shivers says. More importantly, Doxo users can add businesses to the Doxo directory to earmark the ones they would like to see as a Doxo biller, he adds.

The Doxo business directory lists nearly 14,000 businesses, which means customers are likely using their digital file cabinets to store documents or notices from those companies, even if they are not yet set up to send bills and receive payments through Doxo, Shivers says.

Many of those businesses, such as municipal water or electric utilities, don’t have a website for bill payment, making them ideal candidates for Doxo’s service, Shivers says.

Consumers may register for the doxoPAY service for free, but businesses pay an annual rate to Doxo based on their number of bill-paying customers, Shivers explains.

Doxo uses all of the “best-in-class” security methods of encryption, image passwords and other protections that comply with Payment Card Industry data security standards, Shivers adds.

With its electronic bill-paying service, Doxo is focused on one of the fastest-growing markets in the payments industry, analyst Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group, LLC, tells PaymentsSource.

Paper payments remain in heavy use for companies and consumers, so there is an enormous opportunity to convert those to paperless and do it in a way that is less costly, he suggests.

“Doxo appears to have a very good [product] because it is simple and effective, and it solves problems for the consumer and the biller,” Ablowitz says.

However, Ablowitz isn’t sure the digital file cabinet, used as an electronic means to store and organize documents, would be much of a lure for Doxo users.

“The digital file cabinet, it seems, would only be as useful as the number of businesses accepting Doxo payments,” he contends.

Some analysts view Doxo and similar bill-payment or bill-archiving services as a significant threat to banks that may not offer such services to customers (see story).

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