Bibit Internet Payments, the European Internet payment service provider which supports over 50 payment methods, has secured third round funding, despite the recent caution of venture capitalists toward the new technology industry. Bibit, based outside Amsterdam, the Netherlands, will use the eight million euros ($6.76 million) for sales and marketing as well as global expansion.

Its new investor is Residentie Investments, a Dutch venture capital company. It accounts for half of the financial injection, while current investors Paribas Deelnemingen, Continuum Group Ltd. and Twinning contribute the other half. Residentie says it provides venture capital and management experience to innovative enterprises. Of its total funded capital nearly Fl400 million ($154 million) has been invested in some 65 growing companies in Europe and the United States. About 17 of these are Internet and e-business investments.

"Despite the tightening of the venture capital market in the first months of this year, Residentie Investments has not hesitated to enter into negotiations with Bibit," said Paul Schroder, managing director of Residentie at the announcement of the funding. "Bibit anticipates an unstoppable change in the market of payment systems and showed a strong and proven revenue model that is only for a small part dependent on online trade or what we used to call the 'new economy.'"

Joost Schuijff, chief executive officer of Bibit, which he co- founded in 1997, says he had little difficulty persuading Residentie to come on board. Companies that have struggled to secure funding are mostly e-commerce companies, he observes. "We are active not only in e- commerce but in other sectors such as call centers and reservations. We can show steady growth and make true our promises to Venture capitalists.

"The previous funding rounds were used for building the infrastructure and relationships with financial institutions. The third round will be used to build an international sales organization. We are already present in Germany, France, U.K. and U.S. We have 20 people and are expanding rapidly," he adds.

Bibit enables European online payment between the customers, online merchants and financial institutions. It supports more than 50 of the most common international payment methods including credit, debit and smart cards, WAP payments and bank transfers.

Bibit's clients are enterprises selling goods and services through a remote point of sale such as an Internet site, a call center, or mobile shop. Bibit partners with leading European financial institutions to provide merchants with fast access to a comprehensive range of payment methods through a single technical connection. Clients come from a range of online industries such as travel, computers, software and electronics, volume retailers, telecoms and event ticketing.

With Bibit's Internet payment service, all the payments methods are integrated into various e-business models over a secure connection. A detailed information system informs the merchant of all transactions, and provides the merchant with permanent online insight into the order administration. Bibit provides full reconciliation and administrative services, handling both the technical and financial management of the payment solution in a secure environment.

"We are used on the Internet for e-commerce shops, we work for call centers' browser-based systems and for physical point of sale terminals. What they all have in common is that they are connected over the Internet. We are an Internet company rather than an e-commerce company," Schuijff emphasises.

Bibit customers are any enterprises that want to settle their payments over the Net. As the Internet is a global marketplace, Bibit reasons, payment solutions should cover cross-border purchasing. In Europe, this implies accepting and reconciling payments in various currencies, not only through credit cards, but a growing number of country-specific methods. These include Paybox in Germany, Cartes Bancaires in France, BBL Home Pay in Belgium and Solo in the United Kingdom.

Bibit announced in early February its entry into the United States, providing American businesses with access to the European e-commerce market. Bibit says this is predicted to be worth around $67.2 billion in 2001 and will grow to $1.5 trillion by 2005, comprising about 25% of the global e-commerce market. The company has offered American businesses what it says is a seamless end-to-end Net payment solution that integrates more than 50 multi-currency and international payments methods into a single solution. Schuijff says his company, which now has an office in San Francisco, can simplify the process of doing business across Europe's fragmented markets.

"We have had a very good response from U.S. businesses. Research companies told us that U.S. companies are looking for globalization, and the first other market they look at is Europe. If U.S. companies want to go to Europe, they must face changes in payments methods, logistics and legal matters," Schuijff says.

"We process transactions in lots of different countries and currencies, so it is clear that one connection to Bibit is appealing. We can implement a payment infrastructure to reach many consumers," he claims.

Schuijff says Bibit is currently targeting several U.S. customers, including a large software company selling over the Internet. "U.S. companies coming to Europe are used to uniformity of the market, with one language and currency and not many customs regulations. Europe is made up of diverse markets and payment cultures. A major challenge is gaining a good understanding of the diversity," he says.

Bibit's payment service can be transparent to the customer-it can act as if it is part of the merchant's shop, or it can be branded. In any case, Bibit processes the payment.

When a valid transaction is made, Bibit processes it through the appropriate acquirers in whatever currency is selected and the money is transferred to a trust account. Bibit views the incoming payments and reconciles them against the original unique orders. All communication to and from Bibit's server is conducted over Secure Socket Layer (SSL) connections, encrypting the transmitted information.

Schuijff says that credit cards and direct debit cards are the most popular means of payment in Europe. Others, notably the Wirelss Application Protocol, or WAP, have failed to make much impact. "We have a mobile project with KPN for a WAP-enabled payment method, but it is being used by only one shop in the Netherlands. I expect more of GPRS (General Packet Radio Service, another wireless communications standard)," he says. In March, Bibit reached an agreement with KPN Telecommerce in which clients of KPN's Net Transact service are connected to Bibit's Internet payment service.

"We do all the technology relating to the acquirers and banks for the merchants. We process all transactions, all reconciliation and all the cash management and administration. I would say Bibit is the only company doing this in each market in Europe. There are local competitors such as Worldpay in the United Kingdom, but they don't have the same number of payment methods.

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