LOS ANGELES - Two new electronic billing services catering to the corporate business-to-business market are beginning to hit their stride - and both are being masterminded by former bankers who emerged from the wholesale lockbox world.

It's a good thing for banks, which have been slow off the mark on the e-billing front and can only benefit from having more options to help them get going.

One service, NetTransact, was the brainchild of Brian Hinton, a former vice president at Northern Trust Corp., who in 1996 drew up the first business plan for NetTransact, a billing system for businesses that has since been purchased by a major payment systems vendor, Bottomline Technologies Inc.

The other, BillingZone, was created by Francine Miltenberger, division executive of treasury management at PNC Financial Services Group. In 1997, Ms. Miltenberger was working closely with Xerox Corp., a large PNC customer, to test a concept that has since become the foundation for BillingZone, a joint venture of Perot Systems Corp. of Dallas and Pittsburgh-based PNC.

Bottomline and BillingZone, freed from the obscurity of the bank offices where they took shape, are now plowing into electronic billing, each having snagged several new contracts in the last two weeks. Both companies foresee their systems becoming utilities that banks and other creators of business-to-business marketplaces plug into in order to provide online billing as an additional trading service.

BillingZone announced at the annual National Automated Clearing House Association electronic payments conference here this week that Xerox, H.J. Heinz Co., and CertainTeed St.-Gobain, would be its first customers and that transactions from Xerox would begin flowing through the system in June.

Bottomline announced last week that Citigroup Inc. and Fleet Financial Group would license NetTransact to offer a service to their corporate clients. Then, at a conference session here Monday, NetTransact received what may be corporate end users' first public endorsement of electronic billing.

Barbara Macy, manager of electronic commerce at airline parts manufacturer Hamilton-Sundstrand, said that, in light of results of a pilot conducted with Northern Trust, Hamilton-Sundstrand is pushing use of NetTransact on the companies that represent 80% of its billing.

"This is going to be the way we do billing going forward," Ms. Macy said.

Chicago-based Northern Trust, the only bank to be live with NetTransact, has two companies presenting bills on the system and about 12 paying them, said Mr. Hinton, who left Northern Trust about six weeks ago to become vice president and director of marketing at Portsmouth, N.H.-based Bottomline. The two billers - Frito-Lay and Hamilton-Sundstrand - are publishing about 5,000 invoices a month with an aggregate value of about $20 million, Mr. Hinton said.

Billers benefit from the methods proposed by BillingZone and Bottomline by being able to deliver invoices more quickly, especially to overseas clients, and to resolve disputes and receive payments more efficiently through automation.

Selling payers on the value of paying their bills more quickly and efficiently, however, is not easy, and explains why billers bear the cost of the services. Northern Trust said it is still negotiating its per-transaction fee arrangement with its biller customers. BillingZone's chief executive officer, Eric T. Smith, said the company would charge them on a per-invoice basis, as well as a modest integration fee.

Both NetTransact and BillingZone were built on the assumption that the services would only be successful with buy-in from the payer. Ms. Miltenberger said of PNC's early work on BillingZone, "We knew there would be major cost savings for the billers, but only if the payers came to the party." For that reason, BillingZone gives payers full control over such things as timing and amount of payments.

Payers are apt to realize the benefits of automation once they try it. Ginny Pesta, manager of accounts payable at Stewart's Ice Cream Co. Inc., which pays bills to Frito-Lay through NetTransact, said the company is "thrilled" with the system because "it cuts down on human error."

Bottomline and BillingZone are embarking on major marketing efforts, Bottomline primarily to banks and BillingZone to billers, payers, and banks. "It's remarkable the response we're getting from banks," said BillingZone's Mr. Smith.

One of the main reasons Northern Trust sold NetTransact was to get the system into the hands of banks, Mr. Hinton said. "We knew we had the right business model, but other banks didn't want to buy from a bank; they wanted to buy from a technology vendor," he said.

As it begins working with more banks, Bottomline will be in a position to help develop standards for the industry, Mr. Hinton said. The company already has been asked by the clearing house association to participate in a business-to-business billing committee, he said.

Mr. Hinton, who said he first saw PNC's business model for electronic billing in late 1998, about two years after he began working on NetTransact, said he welcomes BillingZone to the market. "I think PNC is going to be a player," he said, adding that he looks forward to seeing how NetTransact and BillingZone might work together.

After all these years, it is "gratifying" to see the market expand, Mr. Hinton said. Promoting online business-to-business billing in its early days, he recalled, "was like pushing a rock up a hill."

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