eBillit Bills Itself As PaymentOne

Determined to change the way people pay for Internet service and content, PaymentOne eliminates obstacles and payment barriers traditionally associated with making online purchases.

by Patricia Fusco ISP-Planet Managing Editor [November 4, 2002]

eBillit, Inc., one of the leading payment service providers on the Internet, has changed its name to PaymentOne Corp. Joe Lynam, PaymentOne chief executive officer, said the new name reflects the company's rapid growth as a next-generation payment solutions provider.

"The eBillit name has served us well in communicating to Internet-based companies in need of billing services," Lynam said. "However, market demands have changed, and our business has evolved as a result."

Since its inception in 2000, PaymentOne quickly emerged as a premier hosted, end-to-end payment service solution. The company provides a variety of billing platforms for Internet service, digital content, and premium service providers. But the company's most successful billing platform, PhoneBill, takes online transactions offline to the security of customer's local phone bills.

PaymentOne's PhoneBill platform offers a compelling payment alternative for non-credit card transactions, which remains a significant revenue driver for service providers. With no credit card required, no wallet or personal bank information needed, and a simplified, secure purchase option, ISPs can attract a much broader segment of subscribers. Lynam explained how PaymentOne's PhoneBill platform dramatically alters the ability to reach new market segments.

"PhoneBill has been proven to drive about 40 percent lift for our clients," Lynam said. "For example, if an ISP is signing up 1,000 customers a day, when they add paying for services via monthly phone bills as an option, they sign up 1,400 subscribers a day."

With PhoneBill, service providers allow customers to instantly charge Internet services, digital goods, subscriptions, voice services and other forms of Internet content directly to their local phone bill. The company has secured billing contracts with more than 1,400 local phone companies, which gives providers an immediate billing relationship with about 90 percent of U.S. households and businesses. That's access to more U.S. consumers than all major credit card companies combined. According to Lynam that's what PaymentOne is all about—making frictionless payment a reality on the Internet by providing non-credit card payment options.

"The market is evolving and free content is now being monetized. It may start with Internet access and premium services, but service providers need ways to bill for Webhosting or online directory services, too," Lynam said. "Because phone bills are built around small ticket items like long distance phone calls, micropayments for digital content or video on demand and other services are also viable with PhoneBill. This is really about revenue optimization for clients and frictionless processing for users."

Since PaymentOne pioneered its single vendor billing solutions, PhoneBill has remained its fastest growing online payment option. More than 2.5 million Internet subscribers in the U.S. have already registered to use PhoneBill. Of the 1.4 million subscribers registered by clients in the first quarter of 2002, 800,000 chose to pay through PhoneBill.

Using a recurring revenue model, PaymentOne has achieved record growth month after month having billed and collected more than $250 million in just its second year of operation. As a result, the company turned profitable in June 2002. With the U.S. economy trending downward, PaymentOne is bucking the trends and seing revenus rise because service providers need a way to quickly optimize revenues—creating new revenue streams where there were none. Lynam humbly said, "We've had a good year."

Challenges for the Internet industry remain. This year, consumer spending on Internet services, content and commerce are expected to fall short of earlier projections for 2002—some e-commerce projections will fall as much as 95 percent short of original forecasts. Additionally, U.S. broadband connections in 2001 were just 40 percent of earlier estimates.

Only 66 percent of U.S. households own credit cards and according to a July 2000 Wall Street Journal survey, only 16 percent of U.S. consumers feel comfortable using credit cards online. Because platforms like PhoneBill help Internet-based providers remove payment barriers to adoption, ISPs can reach out to a broader market. Couple this with consumer concerns about online security, and PhoneBill eliminates yet another significant barrier to revenue optimization for U.S. ISPs.

But credit card penetration is far lower outside the U.S. For example, only 10 percent of upper income consumers in Latin America possess credit cards. In a cash-based society, PhoneBill ends up a very convenient way for service providers to do business south of the border. Les Riedl, Speer & Associates senior vice president of payment consultancy, said simply show consumers a bulletproof alternative to credit cards and volume will grow.

In addition to providing an innovative alternative to credit card transactions, PhoneBill remains an end-to-end outsourced billing solution that allows service providers a great deal of flexibility in leveraging customer acquisition rates. Servicing clients such as America Online, United Online, Verizon, and BlueLight.com, PaymentOne has become a strategic weapon helping providers increase customer acquisition rates while reducing customer churn. With the likelihood of micropurchases and micropayments looming on the horizon for the Internet industry, PaymentOne's PhoneBill platform is set to evolve into an essential revenue optimization solution for billing problems.

— End