Among the many schemes being floated for cardless payment options on the Internet, the idea of charging Internet purchases to a consumers telephone bill has not yet taken the world by storm. But two young companies predict it will, and have set out to prove their point.
The newer of these ventures is the eBillit subsidiary of Integretal Inc., a private company in San Jose, Calif. Integretal, a 12-year-old company that works with local telephone carriers as an outsourcer of billing and collections, set up eBillit in June, aiming to take advantage of its relationships with telephone companies.
Joe Lynam, chief executive officer of Integretal, said he is trying to persuade Internet service providers and other Web-based companies to work with eBillit so their customers can charge goods and services bought online directly to their phone bills. Among these companies, there is a significant level of interest in the service, Mr. Lynam said.
eBillets chief competitor is a three-year-old Seattle company called eCharge.
For the phone billing service eCharge is targeting foreign countries where credit cards are less pervasive. In the United States it plans to introduce a cardless product called Net Account, which would give consumers a revolving line of credit or a stored value account for Internet purchases.
To offer this product, eCharge has used an industrial loan charter to set up eCharge Bank, and has established a partnership with Washington Mutual Inc.
There are some key differences between the two companies and their business models. Mr. Lynam says eBillits ability to place charges on the local portion of a customers phone bill gives it an advantage over eCharge.
eCharge phone charges show up on the phone bill as a 900 number on the AT&T or MCI page, said Mr. Lynam. eCharge doesnt own that page and thus cannot control the look or format.
We dont want to own the page, responded Truett Tate, eCharges CEO. We want sufficient characters on the billing lines to be able to include the kind of SKU-level information that our technology allows us to do.
Nevertheless, Mr. Tate concedes that some people dislike the 900 number billing format. He says he is trying to get that changed so the 900 number is transparent. It will be a technological truth that wont carry the stigma of the 900 billing.
eCharge aims to create a global acceptance mark that will appear on the checkout pages of Internet merchants alongside todays familiar ones. But Mr. Lynam says eBillit and Integretal do not seek to displace Visa and MasterCard, but rather to serve customers who do not have credit cards or do not want to use them online.
Mr. Lynam said eBillit has 27 corporate clients, including Prodigy Communications Corp. of White Plains, N.Y., which had been a client of eCharge.
eCharge is focusing on developing its eCharge Phone service as a credit vehicle in countries that do not have well-developed credit markets. South Korean Telephone Co. is a significant investor in eCharge and will soon offer eCharge services there, said Mr. Tate, a former Citibank executive.
In the United States the company will focus on its credit product, the Net Account, which has yet to get much customer attention, said Mr. Tate. We need some traction, he said.