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March 5, 2001

Payment For Perishables: B-To-B System Guarantees It

Aucxis teams with Bank to issue Digital Certificates until goods are received

By Cheryl Rosen (crosen@cmp.com)

More on payment systems:

Real-Time Bank-To-Bank Transactions (2/12/01)

Wells Fargo Moves Into B-To-B Online Services (2/5/01)

hen 11 Dutch fish markets got together to form an electronic marketplace last year, they realized that with a commodity as perishable as fish, they couldn’t wait to get a check in the mail before shipping their products to buyers. So they turned to Aucxis Corp., a Canadian company looking for a beta customer for its Real-Time Commerce Platform.

Partnering with ABN Amro N.V., Europe’s fifth-largest bank, the Aucxis system holds buyers’ cash or securities to guarantee payment for perishable goods—anything that quickly loses value. “As far as I’m concerned, it’s the only solution that exists,” says Riekelt Kramer, general manager of the Electronic Fish Information Center Europe, which has been testing the service since early February.

The bank holds the collateral until goods are received. Aucxis issues a digital certificate guaranteeing the payment, then releases the collateral to the seller when goods are received and approved. Ten companies will test the service through April, when it will be commercially available. Pricing isn’t set yet.

Other distribution channels are in the works. Late last month, Aucxis signed a deal with EDS Europe, which will include the service as part of its new Digital Finance suite of services.

“It’s a niche application—but it’s a niche that can be found in many different verticals,” says Rajiv Srivastava, E-solutions client engagement manager for EDS in Europe, the Middle East, and Asia. “Anything in the world that has a sell-by date—whether it’s hotels, cars, or food products—requires a sense of urgency. That’s where Aucxis is so valuable.”

In addition to Aucxis’ collateral management service, the EDS suite will offer settlement services for E-marketplaces, auction software, foreign exchange, and, eventually, security futures and options.