ACH - Automated Clearing House (ACH) is a method in which financial institutions exchange payments and remittance information electronically on behalf of consumers and businesses, and the government makes payments to beneficiaries and vendors. Payments made over the ACH Network include Direct Deposit of payroll, expense reimbursements, pensions, Social Security benefits and tax refunds, automated payments of mortgages, car loans and insurance and utility bills, business-to- business payments, and government payments to contractors. Source: NACHA  Open Financial Exchange (OFX) is a unified specification for the electronic exchange of financial data between financial institutions, business and consumers via the Internet. Created by CheckFree, Intuit and Microsoft in early 1997, Open Financial Exchange supports a wide range of financial activities including consumer and small business banking; consumer and small business bill payment; bill presentment and investments, including stocks, bonds and mutual funds. Other financial services, including financial planning and insurance, will be added in the future and will be incorporated into the specification. US billing organizations will issue more than 15 billion bills to consumers in the US in the year 2000. More than 80% of these bills will come from four industry groups: finance, insurance, telecommunications, and utilities. Consumers will make 19 billion payments in support of these bills as well as other household goods and services. By 2010, Tower Group estimates that 6 billion bills and 12.3 billion payments will be executed electronically. These totals will represent approximately 30% and 45%, respectively, of total US consumer bills and payments. Utilities will use the Internet for 27% of the bills they issue by 2003, according to a Killen & Associates' new study. They estimate EBPP will provide significant cost savings--up to 90% for processing bills. EBPP reduces the cost of preparing and presenting bills from approximately $1.25 per bill to 50 cents/bill--a 60% saving. The cost of processing electronic bills drops by 90%, from about $1.00 per bill to 10 cents. Killen estimates that utilities can save up to $20 billion annually by 2005 if they shift to EBPP. According to the Tower Group, household usage rates of online electronic bill payments are less than 3%, while overall use of online banking exceeds 6%. The Tower Group found that the overall movement toward EBPP has been slowed by the number of players involved, the varied objectives of those players, and the general immaturity of technology models and solutions. Billers are typically focused on reducing billing costs and speeding funds collections as the primary reasons for implementing EBPP. Consumers, however, need more compelling reasons to convert from existing manual methods of bill review and payment, which by themselves are not difficult. In order to increase consumer acceptance, billers and banks need to work closely together to concentrate on customer service and marketing aspects of billing and payment. Forrester Research estimates that 13.1 percent of households will receive and pay bills online by the 2004. IDC Corp., Framingham, MA, predicts that global revenues from electronic bill presentment and payment (EBPP) will reach $825 million in 2004, up from $1 million last year. By the year 2005, slightly more than one-third of all electronic bills will be sent via e-mail by 2005, according to a recent report on e-commerce trends by online research firm Killen & Associates Inc. "The report found that in 1998, Web-based billing systems accounted for 61 percent of all bills delivered electronically, with e-mail bills comprising just 18 percent. Killen & Associates predicts that ratio will even out over the next four years, with the percent of bills sent directly to a customer's desktop growing to 40 percent, and Web site billing falling to 38 percent." Source: ComputerUser.com, August 3, 2000