Netscape enters online billing
Netscape announces software, hosting, and Netcenter content that it predicts will jumpstart online billing and payment.
Forging into a new market, Netscape unveiled the broadest strategy of any of its rivals, which include CyberCash, Oracle, Just In Time, TransPoint, a joint billing venture of Microsoft; payment processor First Data Corporation; and a recent addition--Citibank.
Pumping its announcement, Netscape predicted online billing and payment will take off in 1999, and vendor activity from CyberCash and others indicates Netscape isn't alone in that belief.
Oracle is reportedly briefing industry analysts this week on its bill-presentment strategy. Such briefings normally are preludes to news announcements. As reported in May, Oracle billing software is code-named Tribeca.
Like Netscape, CyberCash also is broadening its Internet billing strategy, which is designed to boost its e-check and credit-card processing business. The payment firm previously pushed the "biller direct" method but has widened its efforts
Pitney Bowes will incorporate CyberCash's Net payment services into Pitney's Digital Document Delivery [D3] offering for online billing and payment. Pitney already runs a large business printing, handling, and mailing monthly bills for American Express and other billers, so the CyberCash alliance allows Pitney a road onto the Internet too. The postage firm has been somewhat slow to enter in the Internet stamps arena but is expected to make an announcement in that area tomorrow.
D3 gives billers a way to render, distribute, track, and process bills via email or the Internet with workflow-tracking capabilities so a biller can monitor every step in the process, whether the bill is delivered on paper or electronically.
With the CyberCash partnership, a biller can embed a "payment key" into a bill that lets customers pay by clicking a button and using their preferred payment form. CyberCash's approach is to let the biller enroll customers for online billings and have them indicate their preferred payment method.
Netscape's offerings include a new application, BillerXpert 1.0--a hosting option for smaller billers that don't want to run online billing and payment in-house, and an offer to license Netcenter content and services to billers that want to create their own Internet on-ramp to complement their billing operation.
Netscape also launched a new "customer care" division for the BillerXpert software and PublishingXpert, which has been moved from Netscape's e-commerce unit to the new division. The new unit will develop software for interactive marketing and customer support and service, said Netscape's Jason Rosenthal, group product manager.
Today's announcements represent a major Netscape initiative to deliver what it promised in June when it unveiled its corporate strategy. CNET News.com had reported in September 1997 that the company would enter the bill payment and presentment market.
In providing software, an outsourcing service, and private-labeled content and services, Netscape will offer by March a more comprehensive package for companies that think they can not only save on billing costs using email and the Internet, but also strengthen ties to customers by letting them change and configure their own services.
Unlike other vendors, Netscape's software will allow companies to deliver bills either via email or by drawing consumers to the company's Web site.
The so-called bill-presentment market is so young that different business approaches are being considered. The "direct" model would have consumers visit a Web site to pay their bills. The "consolidator" approach empowers an entity such as a bank to aggregate bills from many companies, then act as a one-stop location to pay bills. TransPoint. and now Netscape, plan to offer outsourcing.
"It's not a business model battle anymore," Richard Crone, a CyberCash vice president and general manager, said. "It's more a management of distribution channels." Pitney Bowes' D3 product enables billers to enroll customers for viewing and paying bills online, letting them select how they want to receive and pay their bill.
"Netscape is offering everything with a breadth of products and services," said Erina DuBois, a Dataquest e-commerce analyst. Netscape, she said, is pursuing the broadest strategy to date among vendors.
E-commerce analyst Scott Smith of Current Analysis calls Netscape's online billing strategy "an important test case," but questions whether the company has clearly defined its BillerXpert strategy. Open questions in Smith's mind: Who will own the customer data, and how Netscape will coordinate its strategies by cooperating with payment processors like CyberCash, TransPoint, and First Data Corporation.
A novel twist in bill presentment is Netscape's interest in licensing NetCenter content such as news, stock quotes, and more specialized information so billers or banks can set up "vertical portals."
But Smith still questions that approach: "We do not see it as a short-term plus for the product until the overall portal strategy is more clearly articulated."
Netscape also named two customers who are testing beta versions of BillerXpert: Saskatchawan Telephone and Citibank, which will use the Netscape software in Singapore despite being an investor in Microsoft's TransPoint online billing service. Citibank may be playing with both vendors because TransPoint runs only on Windows NT.
BillerXpert pricing begins at $250,000 for two-processor systems running on Sun Solaris, with other kinds of Unix and Windows NT planned for the future.