- 7 - Payment Opportunities From B2B E-commerce McGuffog, April 2001 ©2001 Sixhills Consulting Ltd & Author Value added services In addition to the provision of the basic payment and settlement service, a variety of value added services could be provided as “add-ons” to the basic service. While in principle some of these could be provided independent of providing the basic service, in practice issues of access to data and relationship efficiency suggest that they are likely to be provided to the same organizations that provide the basic service. It is likely that a similar situation to the traditional bank payments market will arise, where basic payment services are provided at near cost, and value added services such as cash management and foreign exchange services provide the “real money”. Potential value added services include:  Reconciliation. Most e-commerce systems require some variant of what is known as a “three-way match”. Effectively, this three-way match reconciles a purchase order (as sent by the buying organization) to an invoice (as sent by the selling organization) to a goods receipt before payment. Post payment, the results of this three-way match must then be reconciled to some record of an actual payment for the goods. Reconciliation as a value added service really just involves the provider of the basic payment services providing the appropriate data to the systems of the buyers and sellers. As such it is applicable to any of the basic payment mechanisms discussed above. Currently several combinations of software vendors and credit card providers offer this service for purchasing cards, for example American Express and Ariba. However, there may be advantages to be gained from providing this service for EFT payments, especially as part of a hub generated EFT payment mechanism, due to the availability of more complete information to reconcile against.  Credit rating services. Regardless of the method of payment used, there may be opportunities for the provision of on-line credit rating services. These could be used by sellers either to turn down suspect transactions, or, more likely, to select the method of payment. For example, suspect buyers might be limited to only purchasing card transactions, while trusted buyers could use “open account” methods.  Credit provision. When any e-commerce transaction occurs, a debtor/creditor relationship comes into existence between the buyer and seller. Clearly it is possible for an intermediary to take over this relationship, offering the seller assured payment and the buyer credit. Indeed, this is exactly part of the function of the purchasing card. However, there is in principle no reason why the provision of credit cannot be extended to the other basic payment mechanisms. In this regard, invoice netting provides a particularly interesting opportunity. This is because, as with all netting systems, the reduction in cash required and finance costs come allied to a rise in credit risk. Thus, the presence of a specialized credit
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