A Fort Lauderdale company, Internet Billing Co., has made a name for itself by doing just that - providing quick and easy ways for small and medium-sized companies to accept payment for their products over the Internet, whether customers pay by credit card or through a 900 number billed directly to their home telephone. In other words, iBill can link Web sites to the credit card authorization network and provide the required back-office interface.

As a result, iBill claims to be one of the fastest-growing providers of electronic commerce, with growth rates averaging 20 percent per month in 1997. However, iBill refuses to disclose revenues, saying only that, in the first three months of 1998, the company had processed 1.75 million transactions. An analyst familiar with the company's financials says it could easily grow to $100 million by the end of 1999.

That puts iBill way ahead of competitors such as CyberCash, a start-up company based in Reston, Va., that continues to bleed red ink, iBill executives say. "There's no slowdown in sight" in the company's growth, crows a recent press release.

But behind this phenomenal growth lurks what could be called "a dirty little secret" that iBill executives don't like to discuss: About 60 percent of revenues come from adult Web sites, like "nakedbabes.com" and "hotkink.com," which offer "instant access to the hardest porn anywhere." Some of these are subscription and pay-per-view sites that sell access to videos of what are described as "rape" scenes; others glorify bestiality and bondage.

"Everyone knows there's money being made on adult-oriented sites," says Lois Messner, the company's vice president of marketing. "A lot of them use our reseller services - because of the nature of the business, it's hard for them to get an Internet merchant account. But we don't like to focus on that. We're just like Visa and MasterCard - we're just doing transaction processing - and our clients could be anybody."

Currently iBill has about 10,000 clients. They include Fujitsu and Found Money (www.foundmoney.com), which help people find unclaimed monies due them. Others, of course, include "bootyshack.com," "sexperview.com," and "afrosex.com."

In fact, iBill caters to lots of small and medium-sized companies that want to sell products and services on the Internet without installing special software or spending several thousand dollars on the payment processing infrastructure, says iBill Executive Vice President Keith Miller. iBill can also accommodate subscription or catalogue sales and recurring credit card billing on a turnkey basis, he says.

For consumers queasy about releasing credit card numbers over the Internet, iBill's Web900 service allows them to access a site's product through a 900 number, so that charges will appear on their telephone bill. Also, iBill TP, a new product, will process transactions for larger companies that already have established merchant accounts with their banks to process credit card transactions.

"iBill offers a very inexpensive and secure way to sell products on-line, and I see iBill really helping to explode this market for small businesses," says Michelle LaBrosse, a consultant in Hartford, Conn., and iBill client who recommends the company to small-business owners. By using iBill, she says, small businesses can avoid paying $100 a month or more for a secure server to take credit card information. There is no software to download - iBill provides a hyperlink on a client's Web page that takes a customer directly to iBill's server, she says.

The small to medium-sized business market has been virtually ignored by larger players, such as Netscape and Microsoft, says Steve Hess, president of Internet Strategies International, a Sunnyvale, Calif.-based market research firm. As such, he says, iBill has virtually no competition.

As a result, iBill is highly profitable, although the company refuses to disclose revenue or profit numbers. "The company could easily grow to $100 million" by the end of 1999, says Hess, who adds that iBill "has found a niche they're exploiting very well."

On-line porn aside, electronic commerce is expected to explode in the next few years, as technology improves and consumers get more comfortable with buying products on the Internet. The Yankee Group, a Boston-based market research firm, says electronic commerce should total $10 billion this year.

Nearly 7 million households bought something on-line in the last six months of 1997, compared with 3.2 million in the year earlier period, according to Odyssey, a San Francisco market research firm.

But once iBill moves out of its niche and goes after larger companies, "they're going to start running into larger competitors, who have a lot more at stake and a lot more resources than they have," Hess says. And that's probably going to happen later this year. As it becomes easier for smaller companies to move credit card transaction processing onto the Web, "it's going to be more difficult for iBill to compete," he says.

Right now, iBill is focusing on building revenues and remaining private as long as possible, Miller says. iBill doesn't need financing, so there is no compelling reason to go public. However, "the offers to go public keep getting better and better, so we'll see what happens," he says. In the meantime, acquisitions are possible.

"If you look at the other e-commerce companies out there, they are growing through acquisition, and many of them are losing money," Messner says. "We are growing, we are profitable, and we are doing it all on our own."

Richard Crone, vice president and general manager of CyberCash, formed in April 1994, says his company is currently processing 1 million transactions each month, except for March 1998, when transaction volume hit 2 million. He adds that CyberCash has close to a 60 percent market share of all Interent merchant account payments today.

"We have the most experience, the most market share, the most transaction volume and the most processor connections," Crone says.

But iBill might challenge Crone's claim to "most experience." In fact, iBill's roots actually go back to 1986, when Don Arnel, a successful game developer, founded Logicom, a Fort Lauderdale company, to develop software for computer bulletin board services, with a few thousand dollars of his own money. In 1996, Logicom formed a limited partnership, obtained private funding and transferred on-line billing software technologies to the new company, Internet Billing Co., Ltd.

Today, iBill charges $0.60 to $0.90 per transaction, depending upon the company's level of involvement in on-line purchasing. For reseller services, iBill also charges between 15 percent and 35 percent of the revenue a site generates through iBill. That's high compared with credit card fees, says LaBrosse, but it's cheaper than processing the transaction themselves.

With transaction volumes that high, iBill expects the $250,000 it just spent on fault-tolerant Tandem servers to be sufficient only for the next six months, Miller says.

Hess says iBill "is destined to get gobbled up," perhaps even by Microsoft or Netscape. Right now, though, "they aren't on anyone's radar screen."

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