Netscape says it fits the bill

Seeking to sqeeze more revenue out of its popular Web site, Netscape is preparing to help businesses and surfers present and pay bills online.

2 min read
Netscape Communications (NSCP) is preparing to give businesses and Web surfers an opportunity to present and pay bills online.

"It's one of several commerce services we are going to bring out," Mike Homer, Netscape's executive vice president of sales and marketing, told CNET's NEWS.COM. Netscape declined to say when any new e-commerce services might be launched.

Netscape's enthusiasm for online "bill presentment" underscores growing interest in that market niche. Electronic bill presentment lets utilities, insurers, credit card issuers, and other billers invoice customers online, rather than through the mail. They save postage, which reduces handling costs, and may even get their money faster.

Netscape chief executive Jim Barksdale said Netscape will be a middleman in the billing world, not a company that handles the money.

"Various organizations in the banking industry, for instance, are very interested in collecting bills," Barksdale said, declining to name potential partners. "We would be reselling this connection service [via Netscape's Web site] to people who want to be in that business."

"Microsoft (MSFT) has a totally different way of looking at this," Barksdale added. "Microsoft sees a role where they are a receiver of the funds; we see ourselves as the intermediary. That's a subtle but major distinction."

Gary Craft, an analyst at brokerage house Robertson, Stephens, in a report last month pegged the electronic bill presentment market at $1.5 billion. He thinks other high-traffic sites like Netscape will also get into bill presentment in some form.

"Historically, that market has been labeled home banking, which is the payment side," Craft said. "But the tail is the payment; the dog is the bill, and the way a bill is presented will be a channel."

Technology and service providers are circling the online payments market hungrily. Microsoft, through its MSFDC joint venture with payments processor First Data (FDC), has announced plans to offer software and services for both bill-paying and bill presentment.

Integrion, a joint venture of IBM (IBM) and 18 major North American banks, will begin testing bill-payment systems next year. Integrion, which focuses on "bank-centric" solutions, will be boosted by its recent acquisition of Visa Interactive.

Online payments firms CheckFree and CyberCash (CYCH) have online billing systems up and running today. CheckFree, which has 1.8 million bill-paying subscribers, this week announced a bill-presentment deal with Core States Financial Corporation (CFL), which will offer CheckFree's service under the bank's own brand.