VC’s Finally Realize Billing is the Future of e-Commerce
Both of these large investments coming in within the same week are a sign that venture capitalists have figured out something that most businesses still have not. They know that more and more of the economy is moving to a “services” model and the ability to offer diversified, on-demand billing solutions is critical to the future of E-commerce.
The companies that will excel in the near future are the companies that are first to embrace the evolving demands of modern consumers. Customers are no longer content to settle for “one size fits all” products. The modern consumer wants, if not demands, to dictate their online purchases to buy only what they need and not what they don’t.
Take the rise of car share services such as Car2Go. Due to fiscal restraints and higher expectations in customized services, modern customers are choosing to pay for a car only when they need it.
The way the service works is a consumer decides they need a car for the next few hours, they look up on their mobile device for a Car2Go car near them. They can then use their mobile phone to pay for the rental, at a fraction of the price of traditional full day rentals.
Once they pay using their mobile device, the car remotely unlocks with keys inside. The customer then uses the car for however long they need it and then park the car again, locking it with the keys inside. The customer gets the exact amount of service they need, without having to pay exorbitant monthly insurance costs, maintenance costs, and a monthly car payment.
This service is doubling in revenue every year since its debut less than 5-years ago. Zipcar, a leader in carshare service is preparing for an IPO, which will give them the capital to expand operations to secondary markets.
The challenge for companies trying to offer this level of on-demand and usage based service is the complexity of the billing process. This is the crux that will decide if companies will be able to successfully meet their customer’s on-demand needs.
Venture capitalists realize that the need for customizable billing solutions, which can be accessed and scaled, up or down, and on-demand, are experiencing a dramatic increase in growth as companies struggle to understand the complexities of subscription and usage-based billing. Companies like Austin-based Transverse, a leader in the online subscription billing market, will be the mediators to help businesses negotiate the complicated requirements of on-demand services. Transverse’s advantage in the new on-demand billing marketplace is that they were the first to build and market a cloud-based on-demand system for the most complicated of billing industries, the telecom industry. They are offering a version of their very-broadbased Business Logic Execution Environment Platform, or blee(p) for short, for the online recurring and usage based billing and payments marketplace.
Telecom billing has long been dealing with the complicated problems of usage charging, managing various price tiers, multiple levels of subscription costs and complicated customer hierarchies. For decades, these needs were meet by only a few companies who offered built in software solutions that could cost hundreds of millions of dollars and took years to develop. Advances in new software architectures have changed all that. New cloud-based software systems allow small and mid-sized companies the ability to handle complicated billing models using an online software solution like Transverse’s newest product TRACT.
TRACT is an online software solution that enables businesses to report all of their on-demand usage information to a single online source, which then handles all the order management, billing and payments for both the user and the provider. This allows businesses to easily and quickly offer customizable service options to customers, without any added stress and confusion. Using platforms like TRACT, companies will be able to expand their product or service offerings to incorporate all kinds of on-demand options. This is ultimately the future of E-commerce, customers can buy only what they want, whether it be more or less, when they want it.
The news of venture capitalist so aggressively funding online billing providers just proves that the future of this on-demand marketplace rests almost solely on the ability of companies to be able to track and bill these complicated on-demand services. But make no mistake, this is also the future of all business; consumers are no longer content to settle for off the rack offerings by companies. The companies that excel the most in the next ten years will be the companies that are first to embrace this epic shift in consumer demand, with on-demand.
Barry Diller the CEO of InterActive Corp said it best during a speech at the Advertising 2.0 conference. When addressing the future of commoditization of the Internet Diller said, "The real trick and key is... the billing system, [The billing system] is the answer to what is going to happen on the Internet."
