The B2B processing edge

When 3Delta Systems Inc. was launched in 1998, the company's management team had extensive experience in the business-to-business (B2B) world but, atypically, not so much in the payment processing sphere.

However, 3DSI Chief Operating Officer Aaron Bills said that mix gave the fledgling company the expertise to know what tools and systems were missing in the marketplace, as well as a unique understanding of its clients' diverse needs.

3DSI's specialty is secure, Internet-based purchase and credit card processing solutions for enterprise, B2B and business-to-government customers.

Bills said selling processing to retailers has become a commodity business; it's mostly price-based. But with B2B, "you're looking at value-based selling.

"It is more of a consulting approach. It probably takes more time and thought upfront in understanding your client's business, but it's much more interesting. And more rewarding."

Bills and 3DSI Chief Executive Officer Allen O. Cage, Jr., co-founded the company. The management team includes John Zampino, Chief Financial Officer; Chris Browning, Vice President, Software Engineer-ing; Rick Ricker, Director, Operations; Steve Dieringer, Director, Emerging Markets; and Gena Fiegel, Director, Marketing Communications.

A fresh and flexible model

Bills noted that some of the company's solutions, which were pioneering nine years ago, have become mainstream. He believes 3DSI was prescient about the B2B market's processing needs.

"One of the things that was uncommon back then -- but that we felt was very important -- was that our service is fully hosted," Bills said. "Deployment can be a huge headache for our customers, and with every upgrade that headache is revisited."

According to Bills, 3DSI's Applica-tion Service Provider (ASP) model is more cost-effective and flexible than distributed software systems (PC-based software or software installed on a server).

This is because 3DSI carries much or all of the responsibility for product updates, maintenance, security updates, database backup and customer service. Instead of paying upfront licensing fees, 3DSI's clients pay on a subscription or transaction basis.

Futhermore, as business needs change, the ASP model allows companies to modify their systems to incorporate new business tactics by simply changing their user interface.

Mary Jane Kornbau, Credit Manager of Bosch Security Systems, said the ASP model attracted Bosch to 3DSI.

Bosch had previously used an installed software solution to process payments. But after an upgrade, it suffered from a host of problems ranging from incorrect charges on customer invoices to credit cards locking-up.

"Having a host environment, we are no longer vulnerable if software enhancements have not been forwarded, and we do not have to deal with installation," Kornbau said. "Everything is handled by 3DSI, and the most recent versions are always there."

She added that there is less chance of system errors and incorrect processing problems between Bosch and its customers. And all of this frees up "valuable IT time."

A secure approach

Security is also paramount for 3DSI. "Even in 1998 we knew that safety measures had to be built in," Bills said.

When card Association compliance issues and the Payment Card Industry (PCI) Data Security Standard developed, "we were ready for it," Bills said. "It didn't take much scrambling on our part to be PCI-compliant," a status 3DSI maintains today.

He noted that 3DSI was the first payment processor to become certified on all card Association security platforms before PCI was widely adopted.

The right level

3DSI's products accommodate consumer cards and business cards. Its applications are designed for face-to-face, MO/TO and Web shopping environments and can be integrated with accounting and order entry systems. The company's solutions also enable secure processing of government and corporate purchase cards.

"3DSI is the level-3 expert and industry leader," Fiegel said. "The key to attaining the best interchange rates on purchasing cards is to include line-item detail about the items purchased, also called level-3 information."

Fiegel added that 3DSI developed a network geared specifically to the purchasing card industry and is the level-3 expert "focused on delivering the best processing rates available."

Bosch sought level 3 processing when implementing its new system. "Level 3 processing is more cost-effective," Kornbau said. Bosch can now provide customers the details needed to reconcile back-end information. Level-3 data contains specifics about the items purchased, including part number, description, quantity, unit of measure and price.

The skinny on products

3DSI has five main product lines: EC-Zone, EC-Linx, EC-Batch, CardVault and EC-Pay.

• EC-Zone lets anyone with a Web browser process credit card payments. It can be used by any number of employees in any number of locations, as long as they have Internet access.

  It is included with all 3DSI solutions. EC-Zone provides full customer and transaction history -- including downloadable detail and reports.

• EC-Linx is designed for suppliers developing Web commerce applications that require real-time payment processing and authorization.

  EC-Linx allows host-to-host, real-time credit card authorizations via 3DSI's Internet payment gateway. It can be integrated directly to customers' accounting systems, Web sites or other computer systems.

• EC-Batch is a file-based interface for companies that want a batch interface to internal computer systems. Files are delivered to and from 3DSI's secure Internet gateway using file transfer protocol and file-level encryption.

• CardVault reduces the risk of storing sensitive card information on merchants' internal systems. It allows a company to submit cardholder data to 3DSI's secure payment processing network, where it is received and encrypted in 3DSI's database. Subsequently, merchants only need to provide a corresponding key to access card data.

• EC-Pay is an invoice payment system that lets buyers automate and initiate payments to sellers and use the credit card processing networks to disburse funds. The EC-Pay application is software independent, so buyers can interface the service with their existing applications.

A juicy opportunity

"For those who have a strong interest in B2B, we have a reseller program where we offer a buy rate or capacity type plan," Fiegel said. "The capacity plan is based on a larger type commitment and is more flexible and rewarding." Fiegel added that 3DSI services are sold as an ASP, which means "there are recurring start-up fees and annuity type revenue stream."

Bills said the most important benefit for merchant level salespeople (MLSs) is the B2B marketplace's potential.

"You're looking [at] 35% to 40% growth in a year in B2B," he said. "You can't find that in retail. There are fewer transactions in B2B, but they're bigger transactions. In retail the average ticket may be $55; in B2B it's $750. The B2B market is tremendous."

3DSI is firmly rooted in the B2B sphere. Perhaps more ISOs and MLSs will find a home there, too.

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