Banks with accounts receivable to collect can put them out to the highest bidder on a new auction site called ClaimX.com.
Roland Gary Jones, a bankruptcy lawyer in New York and founder of ClaimX, said he came up with the idea while researching the on-line potential of accounts-receivable collecting, which he said is a $70 billion market in the United States.
"ClaimX is an electronic trading floor for the claims marketplace," Mr. Jones said. "We give people a chance to quickly get cash for money they are owed. Sellers will know they're getting the best possible price because they're listing in an auction open to buyers all over the world."
The first listing at ClaimX, which is in test phase, was a freelance writer's bankruptcy claim against Success magazine. The second was for creditors of Loehmann's, a retailer that recently filed for Chapter 11 protection.
To trumpet the site, ClaimX is conducting a direct marketing campaign aimed at bankruptcy creditors. People owed money by bankrupt firms can sell their claims on the Internet.
A seller listing a claim on ClaimX identifies a minimum price and specifies how long the auction will last. The seller pays a $10 fee and the buyer 1.5% of the closing price, though that percentage falls if a bid is over $500,000. These fees are currently being waived.
When an auction is over, the seller receives notice by e-mail. If there is a winning bidder, the seller can contact the bidder by e-mail and conclude the transaction. The winner is also notified by e-mail and has 10 days to confirm the validity of a claim. Then seller and buyer agree to the legal terms committing them to the deal.
Banks listing claims and choosing bids can do so anonymously by using a code name, Mr. Jones noted.
ClaimX carries out the payment processing by charging a credit card or wiring funds.
The site got started this month with a staff of three. Claim categories listed on the home page include trade receivables, bankruptcy claims, leases and mortgages, royalties, inheritances, lottery winnings, divorce settlements, and defaulted loans.
A chat room at the site gives creditors the opportunity to talk shop with one another and "gripe," Mr. Jones said.
Factoring companies and other specialized lenders are major forces in accounts receivable financing. ClaimX "is serving the market of factoring, and several large banks have factoring subsidiaries," said Peter Cohn, chief operating officer of the company.
Mr. Jones said, "We think this business is very appropriate, because a lot of banks sell off their portfolios of bad loans and bad debts." He expects that defaulted credit card, personal, and corporate loans will make up one of the largest categories served by ClaimX.
"We're taking a fragmented market that's inefficient and making it more efficient for the benefit of sellers,'' Mr. Jones said. "As soon as possible we'll talk to banks, because most have loans that have soured that they need to get rid of."
SpeedPay Inc., an electronic payments company, and CrossLinks Systems Inc., an electronic commerce Web site consulting company, have formed a parent company called E-Commerce Group, under which they will jointly develop and market new payment technologies.
SpeedPay and CrossLinks will collaborate on projects under the ECG banner but will retain their former names when working on assignments independently of each other.
The existing SpeedPay payment product will retain its brand name. More than 80% of large U.S. banks and mortgage servicing companies use SpeedPay's technology, the company said.
"SpeedPay and CrossLinks have a strong history of successfully working together on client engagements, but the separate names caused some confusion in the market about the relationship between them," said Darren Manelski, president of SpeedPay and the new president of ECG.
Mr. Manelski's brother Dirk is president of CrossLinks.