A California company has set out to take electronic commerce down a notch-in cost and complexity.
CommerceWave Inc., a renamed and reconstituted version of a company providing on-line transaction processing systems for banks and retailers since 1986, said its new product, MerchantWave, enables the creation of electronic storefronts within hours for hundreds of dollars. Top-of-the- line, functionally equivalent systems can take months and cost thousands or tens of thousands of dollars.
The Carlsbad-based company wants to enlist banks-particularly those on the merchant-servicing end of the credit card business-to help promote MerchantWave for Internet retailing. It said the system is designed to allow a bank or other "reseller" to "host" tens of thousands of merchants.
CommerceWave expects to have immediate credibility with bankers, transaction processors, and independent service organizations because banking and payment operations are built into MerchantWave, and because the management team has deep roots in the processing business.
CommerceWave officials be-lieve they can take the vaunted capabilities and cost dynamics of the Internet to new levels through a complete "merchant management" package in which payments are a crucial element, but far from the only one.
"The product fully integrates electronic payments, Web-page generation, storefront setups, and point of sale payment management capabilities so that they are completely seamless to users," said CommerceWave president and chief executive officer Randall Pipp.
Mr. Pipp, one of the privately held firm's founders, created a predecessor company, Professional Business Solutions, in 1986. Last year that company combined its network-transaction expertise-clients included financial institutions, retail merchants, and government agencies-with Electronic Pen, a multimedia design and marketing specialist, to create CommerceWave.
CommerceWave is still small at 35 employees.
But the senior personnel tell its story. Last fall Mr. Pipp brought in Tom Welsh, a 20-year veteran of the credit card and point of sale businesses, as vice president of sales.
David Watkins, the director of engineering, came out of card processing operations at First National Bank of Omaha and high-speed payments systems and Banctec Inc.
Electronic Pen founder Sandy Dhuyvetter, whose credits include set and costume designs in "The Empire Strikes Back," is CommerceWave's vice president of marketing.
She and Mr. Pipp's longtime partner Garland Wong, now chief technology officer, did development work for Cybercash Inc., which became one of CommerceWave's strategic partners. As a result, Cybercash's payment systems, including the virtual cash product Cybercoin, are automatically compatible with MerchantWave.
Also on CommerceWave's partner list are the major Silicon Valley technology providers Hewlett-Packard, Oracle, Silicon Graphics, Sun Microsystems, and Sybase. And CommerceWave puts a premium on openness-it will also accommodate the First Virtual payment system and the credit card associations' Secure Electronic Transactions protocol.
But officials keep turning attention back to their bottom line.
Pricing starts at $399 for MerchantWave, plus $49 a month for site hosting, and extra for customization or other support that CommerceWave offers. Mr. Pipp estimated a "complete solution" for a merchant selling 20 products over the Internet would cost $850 plus $99 a month.
That is a fraction of what "high-profile, high-cost companies" like International Business Machines Corp. and Microsoft Corp. would charge, he said. He also contended that CommerceWave is trumping a host of "software- only providers with minimal transaction-related experience."
"Merchants get a comprehensive, easy-to-use, cost-effective solution that can have them transacting commerce on the Internet within a single day," Mr. Pipp said on Jan. 20 when he announced the first shipments of MerchantWave. "Compared to other offerings, MerchantWave gives users the most robust capabilities at the most affordable price."
A testimonial came from SWCI, a Texas distributor for National Security Safe Co. and one of about 30 early users.
"MerchantWave made it simple to get up and running," said Dianne Bristol, president of SWCI. "Its administrative features are easy to use, allowing me to update my products or Web page any time. The product lets me reach a much wider market than was ever possible."
Mr. Pipp said CommerceWave took pains to "fit the paradigm banks are used to," and thereby "help financial services make the transition to the Internet."
"The pricing is designed to fit into the POS paradigm they are used to," he added.
Mr. Welsh, who has worked for U.S. Computer Services International, McDonnell Douglas Payment Systems, and Tymshare Inc., said he has focused his marketing on several of the top merchant processing institutions and expects to close some deals shortly.
"Nobody can pick up our 10 years of transaction processing expertise overnight," he said. "By combining that with the Internet, we think we have something unique."