Looks we have quite a day going again.Back to 40 cents. Anyways this is on the pnlk Home page
November 13, 2000
B-To-B E-Payment Offers Benefits To
Marketplaces
Vendors seek to overcome previous problems and provide
a complete purchase process
By Charles Waltner
roNetLink.com had a crazy idea when it launched
its business-to-business marketplace specializing in
international trade for smaller companies. Unlike many
marketplaces, ProNetLink actually wanted to help its
constituents buy products.
This may sound like the obvious goal of any Internet
marketplace. But in fact, many marketplaces stop short
of the actual purchase process. They help connect
buyers and sellers, but that's where the facilitation
ends. Marketplace participants are left on their own to
finalize the most important part of any E-commerce
interaction: the exchange of money.
Without help from the marketplaces, companies
typically resort to old-fashioned manual processes on
paper, missing out on further cost savings from
automating money transfers and purchase-order
tracking.
A wave of companies has swept into the market recently to ease such
financial exchanges. ProNetLink, for example, achieved at least part of its
goal with a new payment service from Actrade Capital Inc., says Glenn
Zagoren, chairman of the board for the Web site.
Actrade serves as an intermediary in the payment process by fronting the
money so that buyers in the United States can pay import suppliers
immediately. Then, they don't have to pay on the note for 30 days or more.
But Actrade, like many E-payment vendors, addresses only a small fraction
of the highly complicated business-to-business E-payment and settlement
puzzle. That means ProNetLink must always look to other companies to
deliver the features that Actrade doesn't provide.
Business-to-business E-payment and settlement is complex and challenging. It
requires cooperative efforts, alliances, and integration from banks, technology
providers, and marketplace member companies before the extensive process
can become completely automated and electronic from purchase order to
final payment. Still, the early offerings do offer benefits to marketplaces.
Business-to-business payment is far more complicated than consumer
transactions on Web sites. Consumer-payment settlements require only a
credit-card payment to a single retailer through the common Visa or
MasterCard operations.
A business-to-business payment can include a dozen or more documents
shuffled among buyer, seller, marketplace, shippers, insurers, financiers,
regulators, and other parties. Tying all those different documents together and
completing the deal with the proper payment is no easy task.
Furthermore, business-to-business payment systems must handle financing,
payment, invoicing, reconciliation, authentication, and security. Most vendors
address only one or two of these components. Companies that claim to do
them all actually often cover only some processes well and are still developing
features for addressing other payment aspects, says Avivah Litan, a research
director for Gartner Financial Services.
The list of players is long and varied, with multiple vendors focusing on each
element of the process. Some of the companies involved include marketplace
developers Ariba and Commerce One; financial institutions American
Express, Citibank, MasterCard, U.S. Bancorp, and Wells Fargo; and a long
list of technology vendors, from companies promising full services such as
Aceva Technologies, GE Global Exchange Services, and
FinancialSettlementMatrix.com, to point solutions such as Actrade, Avolent,
BankServ, Bolero, eCredit, and Tradecard.
However, most vendors in this field didn't begin developing settlement and
payment solutions for business-to-business marketplaces until this year and
have few, if any, customers. Even the most advanced of B-to-B marketplace
developers, Ariba and Commerce One, are only now developing E-payment
processes.
Thus, the advice to any marketplace looking for solutions now is simple:
Don't expect to solve all payment issues right away. Some products can
address specific needs, such as international settlements, but it will take at
least a couple of years for truly comprehensive solutions to hit the market,
experts say.
All of these factors have made the market for business-to-business
E-payments extremely messy. "That's the lesson of the day: Nobody really
knows which end is up," Gartner's Litan says. "It's a very confused space
right now."
continue on to page 2, 3
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