PayTrust

www.paytrust.com

PayTrust’s home page does an excellent job explaining what they do. But visually it needs more pizzazz to encourage users to click into the site.

The Company: Just a few days after we finished the March 1999 issue where we raved about start-up bill pay company Cyberbills, we heard of another company with the same business model, Secure Commerce Services Inc. of Princeton, NJ. The company launched a beta of its scan-and-pay service, PayTrust, in January; national release was June 29.

Six of the eight execs, including co-founders, Edward McLaughlin and Flint Lane, came from relational database company Logic Works which was acquired by PLATINUM Technologies in May 1998. The company also has financial service expertise on staff with an operations manager from Crestar Bank and a customer service manager from Merrill Lynch.

The Product: PayTrust is a scan-and-pay bill presentment service provider with an identical product and business model of its two competitors, CyberBills and PayMyBills.com. Unlike PayMyBills, which has outsourced scanning, PayTrust handles all functions in house. To speed up the process, PayTrust has established regional collection centers to receive bills. Bills are posted in GIF format and can be downloaded into spreadsheets, Quicken or Microsoft Money.

Pricing: PayTrust has chosen to underprice the competition at $7.95/mo for the first 25 bills; currently the first three months are free. An annual CD archive is available for an extra fee. The typical customer paying 8 to 12 bills per month saves just $1 or $2 per month with PayTrust. But, because the company allows up to 25 payments for the base fee, compared to 15 for the competition, frequent bill payers will be able to save up to 50%.

Funding: The company has received undisclosed investments from AT&T Ventures and Spectrum Equity.

User Base (estimated): The company won’t disclose its user base but it does say that it’s processed $1 million dollars in bills across 400 merchants since January, or $200,000 per month. At $100 per bill, and 10 bills per customer, that equates to about to an average of about 200 active users prior to its June launch.

Contacts: Edward McLaughlin is CEO, Flint Lane is President, Kenneth Zeng is VP Finance, John Yapaola is EVP Business Development, (609) 720-1818, ext. 115; fax (609) 720-1819.
Address: 29 Emmons Drive, Suite E10, Princeton, NJ 08540.

PayTrust has done a commendable job getting its service and Web site up and running. Unfortunately, they are up against two seemingly more Web-savvy companies who have developed better Web sites and user interfaces.

To move ahead of the competition, PayTrust must use a different strategy. We think their best bet is to give up trying to establish a consumer brand, and offer their pay-and-scan services on a private label basis through other financial institutions. With the right partners, PayTrust could achieve scale ahead of PayMyBills.com and CyberBills that are both involved in the laborious task of building national consumer brands. PayMyBills.com doesn’t even have financial institution partnerships on its radar screen, a weakness that PayTrust could exploit short term.