Electronic Commerce: Former Dove Execs Start Firm for Billing Software

Article excerpt

Hoping to win converts to a new form of on-line payment, a group of electronic commerce consultants has left Dove Associates Inc. to create a software company.

Called the Farragut Group and based in Washington, the start-up is developing Vertical Hold, software intended to let consumers bill their purchases of electronic goods and services directly to accounts held with Internet service providers.

"We want to mimic the cable TV model by allowing users to purchase a subscription to HBO or pay-per-view and have it show up on their bill," said Edward L. Neumann, managing director of the new company and the former director in the Washington office of Dove, a Boston consulting firm.

"That is the future, and until we reach that point, the Internet will be held back," said Mr. Neumann, who also managed the electronic commerce practice at Furash & Co. He is joined at Farragut Group by former Dove Associates colleague Alfred J. Funk, an Internet security expert.

Vertical Hold is similar to a patent-pending system developed by eCharge Corp. of Seattle in that it hopes to piggyback on an existing payment method. Two-year-old eCharge is promoting a system that charges Internet purchases to buyers' local telephone bills. ECharge uses the infrastructure for 900-number billing, and Internet purchases appear on telephone bills as such charges.

ECharge has attracted the attention of several international telecommunications companies, including Telia in Sweden, Cable and Wireless in the United Kingdom, and France Telecom. Executives said they expect more than 5,000 merchants to feature the eCharge billing system by yearend.

The first version of Farragut Group's Vertical Hold is about one-third developed and will not be available until January, Mr. Neumann said. The software will route billing information through the credit card payment infrastructure, which processes the vast bulk of Internet sales. …