Electronic Data Systems Corp. is diving headfirst into the European market for electronic bill presentment.
The Plano, Tex., computer services company, which for the past 14 months has marketed Internet billing in the United States, announced this week that it would seek business across the Atlantic.
Europe is "very attractive -- in fact, wide open -- and the needs of the market match our strengths," said Jay Ruuska, vice president of interactive billing services for EDS Europe. Those strengths, he said, include a focus on business-to-business billing and an already established international presence.
EDS rival International Business Machines Corp. has also begun marketing electronic billing services in Europe through its global services division. Both companies rely on software from BlueGill Technologies Inc. of Ann Arbor, Mich., to format data from legacy systems, complementing it with other technology and their own systems integration services. Many European companies are also trying to get into electronic billing, said Avivah Litan, research director at GartnerGroup, Stamford, Conn.
These firms will compete for a piece of a market that, according to analyst Michael Killen of Killen & Associates, is "getting ready to take off."
Mr. Killen estimates revenues from electronic billing software, services, hardware, and processing will reach $3.4 billion in Europe next year, compared to $4.3 billion for the U.S. market.
EDS executives said they expect to sign a significant number of European clients in the first half of 2000 and will focus on the telecommunications, government, manufacturing, and financial sectors. They foresee Germany, the United Kingdom, and France emerging as the biggest markets but also predict strong interest from companies in Belgium, the Netherlands, Luxembourg, and Scandinavian countries.
Three of EDS' U.S. customers, including telecommunications giant MCI WorldCom, are sending bills. Five more are in various stages of development.
EDS says it hopes to work with European financial institutions in two ways -- helping them send electronic bills to their own customers and in getting commercial clients up and running with bill presentment.
Mr. Ruuska said European banks have already shown interest in the service. "They've expressed the fact that they are billers, but they also want to do this kind of service for their corporate customers," he said.
In the United States, EDS is working with Chicago-based Bank One Corp. to get the bank's corporate clients up and running with electronic bills. Just several months old, the alliance has yet to yield any contracts.
Another element of EDS' strategy in the United States has been its primary focus on business-to-business billing, which due to its complexity is less developed than business-to-consumer. MCI WorldCom uses EDS to send invoices to its corporate customers, and about 60% of EDS' pending projects are business-to-business.
Mr. Ruuska said that focus will serve EDS well in Europe, where there is less demand for business-to-consumer billing.
"For European consumers, viewing a bill on-line is an extra, unnecessary step, since bill detail statements are often sent for informational, tax, and recourse purposes only and are not critical in the bill-payment authorization process," he said.