Eliance, a five year-old company that started life trying to provide all manner of services to nascent internet businesses has pared down its offerings into something more manageable and now has re-launched as a provider of transaction processing and call center services to would-be online merchants for whom it is not economical enough to provide it in-house. The Minot, North Dakota-based firm has gathered together a set of software and services, ranging from Compaq and VeriFone transaction hardware, through Oracle reporting software to Brightware email software and offers the use of them for a monthly fee to enable merchants to take orders over the web, process the transactions and also deal with customer service queries about the orders. The difference, says Rob Griggs, the company’s executive VP corporate strategy, is that Eliance can offer a complete transaction turnaround of between 11 and 15 seconds, including taking the order, processing and verifying the customer’s credit card and organizing the shipment and it can do it all for far less than the merchant could do itself, it believes. The company is doing around two million transactions per month for its existing client base, which it claims spreads to some 10,000 web businesses right now, having completed its first transaction in June 1996. It is currently handling up to 30,000 calls and up to 8,000 emails a day. Eliance charges nothing to get started and requires one copy of its 1.5 Mb virtual PoS server on one of the merchant’s servers. It includes scripting that does fraud checks on users as soon as they click the submit button on the merchant’s web site. Costs for the service vary from merchant to merchant, but the company reckons on average it comes to about 14% of the cost of each transaction. Eliance acknowledges that it faces some competition in elements of what it does, but believes that it is alone in terms of doing the whole transaction, plus the support. The company is profitable, says Griggs and did $23m revenues in 1998. The financing has all come from operations and the chairman, Jeffrey Farstad, who made his name in the oil wholesale and distribution business. The company has operations in Minneapolis, Minnesota, and Qingdao, China as it found Minot, North Dakota, too far from anywhere to do this kind of business effectively in its early days.
