Whatever about the many things e-commerce will do for business, it will never make paying bills a pleasure. However, it can make it easier, saving time and money for the receiver and, in particular, the sender of bills. Enter interactive billing, the latest word to get a single letter prefix as it finds an online parallel: ibilling.

Interactive, not just electronic as in e-commerce or email, because its proponents say this is not just about delivering bills electronically - which is not exactly new - but it allows bills to be sent, analysed, queried and paid online.

The model for ibilling is fairly straightforward: a billing integrator company interfaces to the billing system of, say, a telephone company, coming up with an electronic version which preserves the look of the existing paper bills. It then sends the bills to both corporate and consumer customers over secure Internet connections, providing them with software to analyse and query the bill, and finally accepts payment electronically and forwards this to the bill issuer (or so-called "biller", as the industry now says).

Naturally there is a commission, but the ibilling companies say the improved efficiencies mean savings all round.

One such company is Dallas-based EDS, founded originally by billionaire Ross Perot, who now owns a rival firm, Perot Systems. Earlier this month, EDS launched its ibilling system aimed at big billers with business and consumer customers. According to Mr Dan Twing, the director of interactive billing services at EDS, the system offers savings to businesses and consumers receiving bills, with even greater savings for the billers.

The consumer savings are marginal, he says, based on elimination of charges for postage, cheques or bank fees, although recent trends in billing and banking have already eliminated some of these costs anyway.

Businesses, on the other hand, can make more significant savings, says Mr Twing. "A corporate credit-card statement very often comes on a truck, and there's pages and pages of data," he says, meaning lots of processing and evaluation before the bill is approved for payment.

"Automation simplifies this," he says. The business can email questions to the biller, analyse the bill using tools provided by the ibilling company, research past bills, and finally set up automatic payment options.

For example, he says, telephone bills could be sorted by call cost, by call time, by number, or even in the future linked to telephone books whereby the call details could indicate who calls were made to.

Likewise, credit-card bills could be analysed and sorted so that all payments made in a particular city appear together, or the order of transactions could reflect the times a card was used rather than the times the payments were processed, which are frequently different. Such tools would ease the task of analysing bills within companies.

But the biggest advantages accrue for the billers, who save not only on the printing and mailing costs of bills, but also on returned payment processing time and on customer support, according to EDS. Mr Twing estimates savings of from 60 cents upward on paper, postage and handling costs per bill, and more importantly a reduction of three to six days in the time to process returned payments.

The traditional strength of EDS is as a systems integration company, which is important when interfacing to the many existing billing systems. Even though the company may deliver bills, it also works with the well-known Internet bill delivery and payment companies such as MSFDC and CheckFree, known as consolidators.

MSFDC, an alliance of Microsoft and First Data Corporation founded in June 1997, is currently running a pilot programme with some of the largest billing companies in the US. These include the Edison companies of both New York and California, Mobil, and Xerox.

MSFDC cites several advantages for billers, such as error-free remittances and flexible payment options, while retaining control over the look of the bill. Based in Denver, the company plans to launch the service "towards the end of this year".

Many of MSFDC's billers are utility companies, because utility bills are often straightforward. Here in Ireland enquiries to the banks did not reveal any utility companies actually using ibilling, but the ESB is looking at the technology, even if it might be some time before bills are paid online.

"It is definitely our intention in the future to allow our customers to conduct business transactions over the Internet," an ESB spokesman said. However, he said, the first services will be in non-financial areas such as meter reading adjustment, change of account name, change of tenancy, and change of payment method.

The ESB also said: "Over time, we expect Internet-based transactions to become one of the most secure and cost-effective means of collecting payment, and will then be actively encouraging its use."

Telecom Eireann is looking at interactive billing, with a current "small-scale" trial involving SME customers receiving call details and analysis software online, at the same time as their existing paper bills.

A spokeswoman said that although she could give no timeframe for widespread ibilling, it was likely in the near future. "It's the way forward," she said.

Eoin Licken is at elicken@irish-times.ie