PaymentOne allows ISPs to outsource billing and customer care, with an important bonus—they can charge their fees to a customer's phone bill, allowing them to attract a whole new range of customers.

by Jeff Goldman [October 22, 2001]

Integretel, founded in 1988, offers outsourced billing and collection services to the telecommunications, Internet, wireless, and utility industries, supporting a wide range of payment methods. In March of last year, the company formed a subsidiary, eBillit, specifically targeted towards ISPs, content providers, voiceover IP providers, and providers of enhanced Internet services. The subsidary renamed itself PaymentOne on November 11, 2002.

PaymentOne offers outsourced solutions for just about every area of billing and customer care, but their key selling point is their ability to charge a customer's fees to their phone bill. Don Teague, PaymentOne's Vice President of Sales and Marketing, explains that Integretel's extensive experience has been crucial to PaymentOne's offering. "Integretel's been in the customer management, direct billing, and phone billing business for thirteen years, so we're leveraging some infrastructure and some know-how," he said.

Their services may be outsourced, but please don't call them an ASP. "We prefer the term 'service bureau,'" Teague said. "The difference is real know-how, and elbow grease, put into understanding the data associated with the customer. We do all kinds of trending and reporting, and make recommendations to our clients about what demographics and regions are being more receptive to one payment type than another."

PaymentOne (800) 747-4028 sales@PaymentOne.com

In other words, PaymentOne does a lot more than just host an application for you on their servers. "The application, the infrastructure, all that stuff, a person should be able to know that's going to be up and running—those things are given today," Teague said. "The part that's not given is, am I partnered with a service provider that truly is dedicated to analyzing my data and making recommendations on a day-to-day basis?"

The communication bill
PaymentOne can handle all aspects of registration, validation, billing, and customer management—or you can separate out any pieces of the total solution (pictured below) you want. The system is set up to easily integrate with any back office billing system you might already be using, whether it's packaged or homegrown. This means that you can outsource some aspects of your billing and not others, or you can take advantage of specific PaymentOne offerings without having to change your billing system.

Because PaymentOne's customers range fro ISPs to content providers, their needs vary widely. Teague notes that companies that are just beginning to charge fees may want to outsource most of their billing and customer care, while those who have already established a system will have more limited needs. "As we're seeing people come into the voiceover IP, content, and enhanced service markets, where they're having to monetize for the first time, that whole back office can be outsourced to us," he said.

PaymentOne has a strategic partnership with Portal Software, which allows Portal's users to connect directly into the PaymentOne system. Ultimately, though, that doesn't make much of a difference—by now, Teague says, PaymentOne has integrated with just about every major billing software product on the market. "We have a standard API that companies like Convergys' or Portal Software's data can plug right into our interface, and then we can handle the billing," he said.

Invoices (example pictured right) can be processed through PaymentOne's DirectBill system, or online through the WebBill solution. End customers can make payments through credit cards, ACH debiting, or through their phone bill. Teague says that the third option, in the form of PaymentOne's PhoneBill offering, is what makes PaymentOne stand out. "Through 1400+ billing and collection agreements, we're able to cover over ninety percent of US households and businesses, and allow the end consumer to bill directly to their familiar and convenient local phone bill," Teague said.

Teague points out that a phone bill (example pixtured left), unlike an ISP's invoice, is something that no consumer is likely to set aside—and charging to a customer's phone bill has other advantages as well. "Middle America, blue collar America, either doesn't have a credit card, or has a much higher anxiety associated with using that credit card for Internet-related transactions," Teague said. "Hence, we're seeing hundreds of thousands, and millions, of new subscribers billing to the local phone bill."

That market of new Internet users, Teague explains, is definitely worth exploring. "Only 65 percent of US households have a credit card—and of the people that have a credit card, only 15 percent are actually comfortable using them for online transactions," he said. "We're now into the millions of end customers who have chosen the PhoneBill payment option."

Ultimately, it's all about fitting the payment process to the customer's comfort level. "What happens right now is we stop a lot of customers or consumers at the cash register because we don't have all the payment options that they really want to use," Teague said. "We're seeing that many consumers want to bill a communication charge to their communication bill."

Still, don't be fooled into thinking that PaymentOne is just about the phone bill—Teague says that many ISPs that are initially attracted to PaymentOne because of the PhoneBill offering soon find themselves exploring other options. "Next thing you know, we're doing their web billing, their direct billing, and we may be handling their customer care," he said. "The relationship seems to be expanding over time, starting with PhoneBill."

Pricing for all of PaymentOne's solutions is based on a percentage of the line item billed, and is tiered according to volume. This means that all of the usual advantages of outsourcing apply—upfront costs are minimal, and PaymentOne is comfortable working with companies from the smallest startup to the largest ISPs in the market. "What it allows us to do is work with startup companies and encourage their growth," Teague said.

Teague is excited, to say the least, about the market potential. "We achieved a little over $50 million for our first year of business, in terms of dollars billed," he said. "We've now exceeded over $40 million in our first quarter of our second year. We are at the hockey stick in our growth curve, and we're expecting to blow the lid off this thing over the next 24 months. The world is showing us that billing to the phone bill is the way that they want to pay."

Who wants to write a check?
Angelo Tullo is President and CEO of the Arizona-based YP.Net, Inc., an online Yellow Pages directory with over 100,000 subscribers. In December of last year, the company founded the ISP Simple.Net. According to Tullo, the name says it all. "We felt there was a real need for a very easy solution for providing ISP service, and an easy way to bill for it," he said. "It's been very effective for us."

Tullo has been working with PaymentOne since before it was born—YP.Net processes its billing through PaymentOne's parent company, Integretel. Now, less than a year after its founding, Simple.Net has about 20,000 subscribers nationwide, with almost all of them paying through their phone bill. Tullo credits PaymentOne with a large part of the responsibility for his company's efficient growth. "It's so easy," he said. "Who wants to write a check for nineteen dollars? The phone billing has been outstanding for us."

And it's easy for Tullo as well—he says that PaymentOne has eliminated any need for a back office billing system. "Our 20,000 customers are billed every month through PaymentOne on the phone bill," he said. "It's easy for us in that we provide one data stream that we send to PaymentOne every month, and that's basically our accounts payable for the month."

Tullo recalls that PaymentOne's customer service has followed through when it mattered. "We've found PaymentOne to be very helpful in our needs when we do have questions or problems," he said. "Recently we had some disruptions regarding the World Trade Center, and they've been very helpful to us. They made sure they were able to get the billing done."

Ultimately, Tullo says, the greatest benefit of using PaymentOne has been in attracting a customer base that they might not otherwise be able to draw. And Teague agrees. "We're a booster shot, by giving you access to the next generation of Internet adopter," he said. "Those folks who have not yet chosen an Internet Service Provider, we are finding many of them have not chosen an Internet Service Provider because of payment options not meeting what they have available to them."

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