Originally published on June 5, 2000 and brought to you today as a time capsule.
American Express (NYSE: AXP), Ariba (Nasdaq: ARBA) and VeriSign (Nasdaq: VRSN) announced Monday that they have formed a strategic partnership to develop an integrated card payment processing utility for online business-to-business (B2B) transactions.
“With the dramatic acceleration in the deployment of buy-side, sell-side and marketplace solutions, there is a growing demand for a new generation of Internet-based payment services that can be tightly integrated to B2B business processes,” said Eric Bochner, vice president of Ariba Commerce Services.
The Mountain View, California-based Ariba plans to integrate VeriSign’s B2B payment connectivity services into the Ariba Commerce Services Network (Ariba CSN).
The companies say that the integrated payment offering will allow buyers and sellers to electronically exchange transaction information so that payment requests — based on established purchase order prices — can be triggered at shipment time.
The new system will save time and money by eliminating manual processes in the authorization, settlement and reconciliation processes. The companies say that the accuracy of transactions will be improved and the order processing cycle time for both buyers and sellers will be reduced.
The partnership will allow Ariba, American Express, and VeriSign to take advantage of an exploding B2B e-commerce market. In the last several months, B2B e-marketplaces have sprung up in the automotive, aerospace and retail industries.
New research released Monday by market research firm Harris Interactive and B2B industrial trading site IndustrialAmerica predicts that buyers, suppliers and distributors in the US$1 trillion industrial supply industry will almost double their e-commerce transactions in the next 12 months.
Currently, only 34 percent of the trading partners in this global market are developing and incorporating e-commerce strategies, according to the survey. That number is projected to increase to 67 percent by next year, and to 83 percent in five years. The main reasons that survey respondents gave for using the Internet are convenience, speed and the ability to make price and product comparisons online.
New to E-Commerce
Chuck Sheridan, President and chief executive officer of IndustrialAmerica, said, “These online exchanges are particularly valuable in markets where e-commerce is still in its infancy, such as the industrial supplies industry.”
Sheridan added, “The benefits of online exchanges will be threefold. Buyers will have tremendous cost savings both in terms of operational and production costs; sellers will have unprecedented control and ability to sell their brand to more customers while dramatically lowering operating costs; and distributors will have the ability to cultivate sales and sell more to customers without increasing sales and marketing costs while reducing overall operating expenses.”