No More Paper Trails!

Friday, Feb. 15, 2002
In the world of e-business, American hegemony is a given. Many successful enterprises, like online auctions, germinated and bloomed in the U.S. before blossoming in Europe. Anachron, a Dutch online billing service, certainly admits that the concept of a cyber-billing and payments service was already well-established in the United States by the time it launched in December 1999.

Despite its Amsterdam location, Anachron (www.anachron.com) is actually the brainchild of three former executives with the consulting firm Cambridge Technology Partners, two Canadians and an American. "They saw a potential market for this service" in Europe, says Frank Akihary, vice president of marketing. But to make online billing work in Europe, the co-founders realized they needed to give it a Continental twist. So they made Anachron a bilingual and multi-currency service (because, despite the euro, many European markets, like Britain, are not in the eurozone). And while American billing services typically sell their software, Anachron is more intent on being an application service provider (ASP), handling all the backroom chores for its clients. While it will sell its software, Akihary says the ASP model is more popular among European clients. "It allows them to focus on what they do best," he says.

While Anachron's service is being offered in both the business-to-business and business-to-consumer markets, Akihary says that the B2B segment is the more robust in Europe. That, too, is different from the U.S., he adds, where consumer online billing is popular. "The market in the United States is still about 18 months ahead of Europe," he says. That said, Anachron is involved in some trial B2C operations, including one with a large, British telecommunications company. Akihary expects the service to be popular not only with telcoms, but utilities, e-tailers and insurers.

Here's how Anachron's service works. Customers receive notification that their invoice has been posted online, and they can visit the site to review it. If there is no dispute, then payments are handled automatically, as well. In B2B transactions, this is usually done as a bank-to-bank transfer. In consumer billing, the customer's bank account or credit card is automatically debited. "There is no paper trail," Akihary enthuses. And that's why online billing is popular with businesses — because the cost of printing and posting thousands of bills can be extremely costly. Customers who want a hard-copy record need only print their own. Anachron charges to implement the service, and clients then pay a monthly fee based on the number of billings handled. So far, it has also received $6.6 million in two rounds of funding, and Akihary anticipates first profits some time in the third quarter.

Now that Anachron has successfully adapted the U.S. online billing model to the European market, it wants to sell its version to Americans. It expects to open a U.S. office in June because it thinks its multi-currency, bilingual service could be popular with global American companies. To accomplish that mission, Anachron will seek joint ventures, Akihary explains. Better to work with entrenched American rivals than taking them on head-to-head.