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To: Link Lady who wrote (2724)	6/23/1999 12:55:00 PM
From: Link Lady	Read Replies (1) \| Respond to of 3896

Interesting article. Gives an idea of the costs for setting up an e-commerce site. canoe.com Toronto eMerge eager to bring small Canadian retailers online Aiming at a tough market More E-commerce Stories More Technology News By DAVID AKIN The Financial Post A Toronto firm promising to bring small Canadian retailers online is aiming at a tough market segment, experts say. But they see new services that should be popular with small and medium-sized businesses heading on to the Internet. The eMerge Alliance said yesterday it can create a fully functioning Internet storefront for retailers in about a week for a fee of $299 and an ongoing fee per sales transaction of between $3.50 and 70c. By contrast, even modest e-commerce sites can cost tens of thousands of dollars to set up. "I don't envy the marketplace they're going after," said Howard Pearl, chief executive of Microforum Inc. of Toronto, which sells sophisticated e-commerce products. "But it can only help people get comfortable with doing their shopping online." Chris Frostad, vice-president, strategic services at Cyberplex Inc., another Toronto-based e-commerce service provider, said eMerge is targeting a relatively small portion of the Internet retail market. "There's no money in it, unless you can do it in high volume," said Mr. Frostad. "They're playing in a space where they're not going to see a ton of competition immediately because it's not the lowest-hanging fruit: It's easier to sell one $100,000 licensing fee to an organization that has a full-blown IT department than it is to sell to Ed's House of Liquor who's going to phone you twice a week to figure out how to turn his browser back on." But observers concede that eMerge is correctly attacking one of the most significant barriers small retailers must overcome when going online: The setup of credit card payment systems. David Lucatch, chief executive of Valu-net, the lead partner in the alliance, said Citibank will handle the payment transactions, currency conversions, and settlements with the retailer's existing bank. The Citibank services are included in the per transaction fee. "There's a lot of offerings targeted for this small entrepreneur or small business. The piece, I think, that eMerge has offered that makes them different from the other super low-cost or free offerings is the transaction piece, the back end financial, authorization, and settlement piece," said Tracy De Leeuw, national leader for electronic commerce in the information systems assurance and advisory services for Ernst and Young. Many small retailers, contemplating a move online, have complained that payment companies, particularly credit card firms, often demand a hefty security of several thousand dollars against their merchant account. Most small merchants can't afford to tie up that amount of money. Mr. Lucatch said that kind of security won't be required for "qualified" or creditworthy customers. The deposits required by payment authorities is just one part of the usually heavy cost associated with going online. A recent Gartner Group survey estimated that even a dip in the e-commerce waters can cost between $300,000 (all figures in U.S. dollars) while a full-fledged run at market domination can cost a firm up to $20-million in Web site development costs. Chapters Inc. is reputed to have committed to spending $15-million (Cdn) over three years on its site, although neither Chapters nor Cyberplex will confirm that figure. Regardless, small retailers may not have $15,000 to spend on Internet commerce without a guarantee of returns. "For companies with 100 employees or less, it is financially prohibitive for them to really get into the e-commerce game on a full-blown scale, to set up a real big [online] store," Mr. Frostad said. "The answer there is an end-to-end solution."

To: Link Lady who wrote (2724)	6/23/1999 2:13:00 PM
From: swot	Read Replies (1) \| Respond to of 3896

Boy am I ever opinionated today! But you know what they say about opinions... My take on this paragraph is that NA is simply comparing a capital investment to a deposit. It would seem (to me) that BCE Emergis has simply committed to temporarily picking up the costs until the system enters a more advanced stage. At which time National Bank will have to pay a bill for "work completed". This type of agreement would definitely cut back on any initial costs or investments on NA's part. However, I'm not going to deny the possibility that MCF may have some involvement with this deal. Marty P.