Finovate Blog

The Internet has already yielded some great solutions for a number of modern-day consumer problems.

• Finding info: Google
• Purchasing and organizing music: Apple iTunes + iPod
• Keeping track of your friends: Facebook
• Booking travel: Expedia and others
• Getting rid of stuff: eBay and Craigslist
• Paying for it: PayPal
• Tracking your money: Online banking

But despite all these advances, does anyone feel like they are more organized today than they were 10 or 15 years ago? Most of us still deal with stacks of paper bills, receipts, statements, privacy notices, along with emails, alerts, and the occasional voice message from our service providers. And if we forget to pay someone, the financial consequences can be huge. So, it’s no wonder we decide to keep the paper statements coming to help us remember to pay each bill. 

The company that solves the paper-based “organizational mess” could be the next big thing online. While it’s way too early to project a winner, a Seattle-based startup launching this week has as good a chance of taming the paper beast as anyone I’ve ever seen. The company is Doxo, which I wrote about briefly this summer (see note 1 for invites). The company’s DNA is Qpass, an early billing and payments company sold to Amdocs in 2006 for $275 mil. Co-founders Steve Shivers, Mark Goris and Roger Parks all worked at Qpass.

Here’s Doxo’s service in a nutshell, using the Facebook metaphor:  

• Create a secure place online where bills can be stored; let’s call it Facebills.com
• Allow authorized biller “friends” to communicate directly to their customers via Facebills.com, this includes sending the bill itself, plus customer service and marketing communications
• Once the biller and end-user are friends, turn off the pesky paper statements and store everything forever, for free, on the platform

The business model:

• Consumers pay nothing
• No advertising (other than marketing message from biller “friends”)
• Billers pay for the entire platform since it costs them a fraction of what they pay today sending paper bills and processing payments

Why would billers pay for it?

• It’s a fraction of the cost of paper + postage
• Adoption of estatements has stalled at 10% to 15% of consumers even for billers who’ve worked relentlessly to get rid of paper; and the easy way to get adoption, charging for paper statements, gets both consumers and politicians all worked up
• The Doxo platform provides a direct, secure communications path to end users, including marketing messages
• No advertising from competitors makes Doxo more desirable than other third-party systems where billing info might end up residing (e.g., Google/Gmail, Mint, etc.)
• The network effect; managing multiple bills in one place is the carrot to get consumers to give up the paper

What’s missing?

• Billers are not yet on the system in this private-beta release (note 1). Users can set up pages for each biller and populate it with their account info and uploaded statements. This is a temporary limitation; I’ve been assured that some big-name billers are on the way.
• It’s currently a read-only system, meaning there’s no way to pay the bill. Eventually, it makes much more sense to allow customers not only to receive the bill, but also to pay it from within Doxo.

Why it could be huge: This is a classic “network” play. The more billers on the system, the more the consumer benefits and vice versa. Whoever gets this system to scale first will enjoy an enormous “eBay” network effect which will be difficult to dislodge. CheckFree/Fiserv and others have been down this road but have not achieved critical mass, leaving the door open for an aggressive startup to fill the void.

I like what I see at Doxo. And not just its slick UI. I’ve interviewed company execs several times and they have this thing nailed, at least in theory. The user-experience is great, assuming the startup brings in the billers. And the biller’s business case is a no-brainer, if Doxo scores the end-users. We’ll know it has a good shot when a half-dozen big-name billers come on board.   

Why it could lose: Consumers are absolutely not looking for another place to manage their bills. And very few care enough about it to do a lot of work populating a website with account info. Finally, until the portal develops a recognized brand, users won’t trust it. It’s critical that a few big billers endorse Doxo to get it jump-started. Even then, end-users may simply not be willing to spend the few minutes it takes to get set up on Doxo. 

Bottom line: I love it and want all my bills to go here now. So here’s to being able to “doxo” statements to me sometime very soon.    

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Electronic biller page at Doxo for fictional Goliath Bank (21 Oct 2010)
Note: The “To Do” tab is where account statements are delivered

Doxo inbox for receiving statements and other communications

Doxo storage area for filed statements
Note: Users can upload their own electronic documents to supplement (or in lieu of) those received through the Doxo platform

Note:
1. The company has tweeted that it will hand out invites to its followers on Twitter.com/doxo. Update: Doxo sent us some invite codes, use “netbanker” as your access code.