| By Jim Bruene on August 19, 2010 5:51 PM | Comments (4) |
Two significant Seattle-based financial startups are gearing up for launch, something I haven't been able to say since the bubble days. We looked at location-based transaction monitoring company Finsphere last week. Today, we take a peek at Doxo, which is looking to disrupt the ebilling market and bring transactional paper mail into the 21st century.
I met with CEO Steve Shivers and Marketing VP Kevin Frisch last week in their new Pioneer Square office, a nifty location recently vacated by Microsoft. While public details are limited, I've had two briefings with the firm and can say that if it works, it could be one of the biggest financial plays in many, many years. Like Finsphere, Doxo is backed by Mohr Davidow Ventures and Bezos Expeditions.
Of course, the ebilling space is littered with failures including many well-funded ventures that pretty much all ended up being acquired by CheckFree (now Fiserv): MSFDC/TransPoint (Microsoft, First Data, and Citibank), Spectrum (Wells Fargo, First Union, and Chase) and Integrion (IBM and 17 banks) to name just a few. And the ebilling service at Fiserv isn't exactly blowing the doors off, delivering 320 million bills each year (2009), just a sliver of the 40 to 50 billion sent annually in the United States.
All I can say about the startup is that they are creating an online hub where billers can send bills and communicate with customers in a much better way than through snail mail. It's put together in a way that could really speed estatement adoption. And it's funded by the billers, who save money immediately by eliminating paper statements to participants.
As demonstrated by the history of failed ebilling ventures, there are huge obstacles to overcome. But the time may be right for ebilling to finally take off. Billers are frustrated with low levels of estatement adoption, consumers are fed up with redundant email and paper communications, and no one wants to waste natural resources (and money) if there's a viable alternative.
No one has yet figured out how to solve it. Doxo may have the answer. Stay tuned.
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I must say the e-billing space makes me yawn. I am quite curious now to see what is different with Doxo. The fact that billers pay in and of itself is hardly a differentiator and has not worked for others who tried. I have given up on the notion that e-billing has to be integrated inside online banking because that did not drive particular adoption either. Will watch this space!
To me the biggest obstacle with eBilling has been the fragmentation of the eBill system. I get some eBills via Internet Banking (normally provided via the bill payment provider), and I get some via email. eBills in Internet Banking allow me to pay those bills as well - definitely convenient. What's not convenient is getting some bills through Internet banking, and some through email. There are still many billers who do not even offer eBills so I have to get those through the USPS.
I would much prefer to receive all of my bills through a single, secure, electronic lockbox. So if Doxo can make their portal extremely cheap for billers to participate (increasing the number of billers who can/will participate), and provide a way to pay those bills through the portal, I think they may have a better chance at success than prior ventures into the space.
The biggest challenge that all consumer portals have is customer apathy.
As it is many more times less convenient to view a bill online that it is simply to open an envelope, all website based solutions that require registration have paperless adoption rates that stall well below 20%. Critical mass is a massive hurdle when it comes to bill consolidation. Fiserv is still unable to get even 30% of my bills available to me here in arguable the best possible place to do so. (NYC) - And they have hundreds of customers.
joey.themoneymashup.com above talks about a single, secure electronic lockbox.
Actually this already exists, it's called your email inbox. True customer convenience is securely delivering the electronic bill directly into the consumers inbox, WITHOUT the need to go through an registration process and WITHOUT the need to chose or remember any username and password. (And the bill is viewable on email capable mobile devices).
Add one click, no pre-registration, no website to visit electronic payment and you have a solution that is MORE convenient for the consumer than a paper bill.
On top of which, in this model critical mass is not required as the recipient just gets and pays those bills which come into their normal email.
We eagerly await Doxo's launch so we can see what they have done that is different to Fiserv, Zumbox (Remember Spectrum...) ePost and the many other consumer aggregation strategies that are failing to entice the consumer to go paperless.
In my experience the issue with eBill consolidators has been that they suffer from two issues:
I think the Doxo guys get at least part of this... The space needs someone with some vision and willingness to take a risk to enter the market. Right now the space is occupied by solutions being driven by banking partners and banks... The solutions offered are minimalist "get away with" solutions that focus on short term revenue rather than long term consumer value.