Last month, I discussed some of the features that businesses should look for in a B2B payment system (see An Overview of B2B Payment Systems). I also wrote about one of the early entrants into the B2B payment space: Actrade. In today's column I'll examine more of the companies that offer B2B payment solutions.
TradeCard: Finance and Logistics
TradeCard offers a system that handles transaction procurement, fulfillment, risk management, payment decision-making, and settlement. Using TradeCard's platform, virtually any type of transaction can be initiated, tracked and settled.
eRevenue
eRevenue offers a payment system aimed at exchanges. Their software permits exchanges to offer their own clients a suite of payments and collections services, including accounts receivable, collections, and credit guarantees, along with workflow systems. Interfaces are available for all three parties: the exchanges, the buyers, and the sellers.
eFinance: Assessing Creditworthiness
eFinance is a complement to B2B payment systems. It permits businesses to build credit scorecards, then score prospective customers to make the best credit decisions. Their solution also has a fraud-screening component, which allows businesses to set up rules so that some, all, or no transactions are automatically approved.
eCheck2000
eCheck2000 offers a payment system for businesses that fits the bill for small and medium-sized businesses engaged in B2B commerce. eCheck2000 permits businesses to accept funds directly from a customer's checking account, using ACH. eCheck2000 has a direct relationship with the Federal Reserve Board, which means that ACH transactions don't have to go through a member bank. This keeps costs low for businesses. Accepting a payment is simple for businesses and making a payment is even simpler. The first time the buyer pays a specific vendor through eCheck2000, they are greeted with a pop-up window that asks for their banking information. Setup costs are low and transaction costs are extremely competitive. Sellers can import their payment information directly into QuickBooks.
Leaving the Banks in the Middle
The big (thus far unsettled) question in B2B payment systems is will banks retain their position of prominence for business transactions? The payment systems described thus far have sought to eliminate the bank's role, thus reducing the costs for the businesses and the revenues for the payment system companies. Some companies, however, are gambling that banks and other financial institutions are not going to give up the opportunity to have the money exchange hands through them without a fight. As with PayPal, having reached critical mass in C2C and B2C payments without an offline bank at the helm, it's not inconceivable that one or more B2B payment systems will achieve critical mass outside the banking industry.
It's more likely, however, that banks will reevaluate their reticence to offer these services and sign up with one of the following systems. Expect to see these services or others offered by your business bank within the next 18 months. If you don't, consider switching banks.
Virtual Purchase Card
Virtual Purchase Card offers a product to banks and other financial institutions called Virtual Purchase Connection. This permits banks and finance companies to offer their own clients the ability to see - before any decision to accept payment is made - that the prospective customer has the ability to pay. Businesses are used to invoicing, but invoicing requires a degree of trust. Banks that implement the Virtual Purchase Connection - including Wells Fargo and Fleet - give their customers the ability to make and accept payments directly through their existing accounts, as if the buyer and seller both used the same bank. This reduces the risk for the seller and the cost of processing an invoice for the buyer.
Orbian: Where Citigroup and SAP meet
You can't quickly write off any venture created by Citigroup and SAP. Orbian would otherwise be too little, too late. Orbian offers a financial credit instrument comparable to Actrade, but is still in beta (with implementation slated for late 2001). Thus far, their product consists of press coverage about their product. Since their product will be one that includes banks, rather than replaces them, and will likely work directly with SAP, expect it to be relevant from the outset.
VCHEQ
VCHEQ offers its solution to banks, permitting them to retain their relationships with business clients, and offer immediate settlement for global transactions.
When Trust Isn't Enough
Escrow services have a place in B2B commerce - particularly since emarketplaces frequently permit trading between partners who have no existing relationship. The two systems described below offer online escrow services for businesses, emarketplaces, and auctions.
PitneyEscrow and PitneyPay
PitneyBowes offers both an escrow service and a hybrid ebilling system. PitneyPay is new and has not yet been implemented. PitneyEscrow has been around for a while. Together they will permit businesses to guarantee the quality of purchases made from new trading partners by setting up an escrow account. Buyers then have the opportunity to approve goods received before the funds are released, pay via ACH debit, and pay multiple parties as part of a single transaction. The suite of Pitney services is clearly targeted more at the buyer than at the seller, but they represent a good way for businesses with reservations about online transactions to get their toes wet without risking anything.
Wallet21
Wallet21 offers a payment system for auctions that includes an escrow service. Funds are not released until products are satisfactorily received.
Alexis D. Gutzman is an author, speaker, and consultant on e-business and e-commerce topics. Her most recent book, The E-commerce Arsenal: 12 Technologies You Need to Prevail in the Digital Arena, was named one of the 30 best business books of this year. For more information on her upcoming speaking engagements, please contact her directly at agutzman@internet.com.
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