Communications service providers are getting serious about reducing the amount of paper they consume. The drive to “go green” is part of the motivation behind paperless telecom, but increasingly telecom companies are seeing financial benefits as well. Verizon is just one telecom service provider—along with Cox Communications, AT&T and others--that has benefited itself and the environment by reducing paperwork through green initiatives such as online ordering and electronic billing and payment.

As Mike Coyne put it, “Doing the right thing is actually saving money.”

As director of finance operations for the services organization at Verizon, Coyne oversees billing for Verizon’s three main business units—consumer landline, business and wireless. Each unit generates about a quarter of a million bills each month, and bills for all customers are available in a secure manner online. Increasingly customers are relying solely on the online option. For 2008, 8% of Verizon’s consumer landline customers, 18% of wireless customers and 32% of business customers chose to forego the option to receive a paper copy.

“Verizon has very aggressive goals to significantly increase that,” Coyne said. “The goal is to double the number every year for the next several years.”

To support its electronic-only billing initiatives, Verizon had to establish alternative payment options. These include credit cards and payment through an automated clearing house (ACH). With the second option, payment is deducted from the bill payer’s bank account. With either payment method, customers can choose to pay for one month at a time or can set up automatic bill payment.

The ACH option is the most economical for Verizon because the carrier avoids credit card transaction fees. For customers choosing automatic payment, the ACH option also can help customers optimize cash flow. “With direct debit, customers have the money taken out of their account on the last possible day that it’s due,” Coyne explained. “If you sign up for automatic credit card payment, the money is charged on the first day that it’s due.” Nevertheless, he said some people prefer that option because they get mileage in airline frequent flyer programs or other perks from paying by credit card.

Unlike some other types of payments, such as mortgages or health club payments, the amount owed on phone bills varies from month to month. Unfortunately, that reality causes the majority of customers to balk at the idea of automatic payment—even though Verizon will credit people back for any dispute resolved in their favor. Of those who pay by credit card or through an ACH, most opt to handle each month as a separate transaction.

For those people, Coyne explained, “The problem with turning off the paper bill is that it’s a mechanism to remind them to pay the bill.” Verizon is taking steps to address that issue, however. The company is looking at implementing a system that would send customers an email with a hot link to their online bill at the time the bill is issued.

Verizon also is considering offering some type of incentive to customers to opt out of paper bills. On the consumer side, one option might be to include electronic billing as part of a discounted multi-play service bundle. Another possibility might be to automatically enter people into a drawing to win a prize.

On the business side, where bills can include thousands of pages, Verizon is already offering incentives. As Coyne explained, “We’re going to senior-level management and saying, ‘Perhaps we can plant a tree in your name and you can get some good publicity from it in the home town of your headquarters location.’”

Qwest Communications has already found some success with financial incentives for its customers to go green. Qwest heavily promotes a “Pay It Green” initiative to encourage customers to pay their bills electronically and eliminate paper billing. “For customers that sign up, we actually give 1% of their total bill to the K-12 school of their choice within our 14-state local service region,” said Darrell Lingk, director of Environmental Health and Safety at Qwest.

Even for customers who prefer to receive a paper bill, Verizon has made an effort to reduce the amount of paper used. Today’s bills are printed on smaller and lighter-weight pages than those of a few years ago. In addition to reducing the amount of paper used, that change also lowered the company’s postage costs.

About 1.5 million Verizon customers also have opted to receive fewer bills. “Instead of mailing separate bills for wireless and landline service, we put it on the same bill,” Coyne said. Customers opt in after learning about the single-bill option through a bill stuffer or a message printed on their bill.

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