eTELCHARGE.com, Inc. was incorporated under the laws of the State of Nevada on June 7, 1999. Its offices are located at 1636 N. Hampton Road, Suite 270 DeSoto, Texas 75115. The Company has an Internet web site, www.etelcharge.com and its stock symbol is: ETLC.
Business Development
We were organized in June 1999 to provide customers of online merchants with the ability to charge their Internet purchases to their local telephone bill, rather than to a credit card. In May of 2003, the company expanded its service by offering credit card processing for online as well as offline merchants. In May of 2003, the company expanded its service by offering credit card processing for online as well as offline merchants. This move positioned the company to provide the traditional payment options such as Visa, MasterCard.
We are in the development stage and have not generated significant revenue. In the past three years the company has been funded primarily through loans from officers and shareholders.
As we are in the development stage, the initial telephone billing payment option was retired for software improvement and implementation of enhancements. These enhancements focus primarily on speed of transaction and confirmation of approved charge to customer. Once all improvements have been integrated and successfully tested the new 1.1 and 2.0 versions of the initial telephone payment option will be launched.
Initially, with the 1.0 version we targeted Internet merchants offering CDs, video cassette tapes, computer software, books, flowers and food items online to customers via their company websites, to offer our telephone billing option. Under the initial version, following an online purchase by a customer, the charge was billed on behalf of the merchant to the customer's next telephone bill. With AT&T the process was designed to provide an advance against the purchase price prior to the customer paying the telephone bill approximately 30 days after the completion of an online transaction. After deducting our fees, we would forward payment directly to our online merchant. If the charge is not paid by the customer for any reason, including a default or refusal to pay due to a dispute, AT& T would charge back its advance to etelcharge. In this event, our merchant would not receive the purchase price for the goods or services. Under our agreement with Billing Concepts Inc., Billing Concepts will advance seventy percent (70%) of the original amount determined on the first Tuesday after the sixtieth (60th) day from the date Billing Concepts receives billing records from eTelcharge.com; fifty percent (50%) of the remaining balance of the amount determined on the first Tuesday after the ninetieth (90th) day from the date Billing Concepts receives billing records from eTelcharge.com; and the remaining balance of the amounts so determined on the first Tuesday after one hundred twentieth (120th) day from the date Billing Concepts receives eTelcharge.com records. All payments to eTelcharge.com are subject to deductions from all assigned and allocated assessments and taxes charged to the Local Phone Companies.
In April 2006, The Company signed a new agreement with AT&T to bill direct again for special services such as music, video and movie downloads to the customers home phone bill. This new agreement will initially commence billing in the SW region of the United States and cover all other regions of the US in roll out phases from the SE region to the West Coast territory within AT&T markets.
The privacy and security of our billing service could be breached by third parties seeking confidential account information such as passwords and financial account information. Such a breach could subject us to liability from customers and merchants and could harm our reputation, thereby inhibiting the use of our billing service. However, since the customer only provides a telephone number, and not the information from a personal credit card or charge card, the information is less valuable. Because the maximum monthly amount of credit we allow for billing to each customer is only $60, we do not believe it likely that third parties will seek to access this information. In order to make any breach of our system more difficult, etelcharge only approves charges that originate from the customer's home computer and verifies the charge through a telephone call that must be generated from the customer's telephone number.
STRATEGY
eTelcharge.com’s target markets of the initial launch of the 2.0 New Online Currency version represent one of the top ten trends: Micro-Payments. eTelcharge.com will focus on securing its market position as the preferred online micro-payment for down loading of music, movies and satellite radio. The hottest trend for online micro purchases has been propelled by iTunes and others that sell music, videos and movies online. According to Gartner electronic micro-payments, as an industry, are estimated to generate about $60 billion in transactions annually by 2015. By focusing on the hottest markets, eTelcharge.com will distinctly positions itself with a very visible and practical billing solution. In other words, the most practical way to purchase the most sensible items purchased over the Internet is via eTelcharge.com , therefore, establishing the market stake for eTelcharge.com runs wide and deep on the Internet.
eTelcharge.com will provide along with it’s traditional payment options to online merchants a unique security and privacy feature, designed to thoroughly prevent credit card fraud and maintain the consumers anonymity, which are the top two obstructions to shopping online. Clearly, past electronic commerce solutions have not employed effective security and privacy techniques that adequately address consumer demands. This casual and simple process will revolutionize eCommerce. The revenue potential here can obviously be enormous.
In summary, as eTelcharge.com, Inc. grows; we expect to take an additional step to employ outside assistance from a marketing agency to expedite new campaigns.
MARKETING
Management has concentrated efforts in this area for the past several months and summarizes its line of thinking as follows:
eTelcharge.com will accomplish the goal of achieving profitability by utilizing a three prong marketing strategy. First, as a merchant service company we will continue to target cities, municipalities and counties to secure all offline and online transactions for payment of utilities and all fees and charges levied by these governmental entities. eTelcharge will gain market credibility with the citizens of the cities, municipalities and counties that eTelcharge provides it payment services to. Having identified this market, eTelcharge will project a growth rate of one to three new municipality or county accounts per quarter over the next twelve months, creating an established revenue stream for the company. During the second year of utilizing this strategy it is conceivable that our growth rate will double the rate of the extremely conservative first year projections within the B to G (business to government) sector. Secondly, eTelcharge.com will employ a foot in the door strategy by offering the new online currency’s 2.0 phone billing payment version when applicable to online merchants who have signed a traditional credit card processing agreement with us. Management believes that loyalty of branding by association will be created by offering an incentive of a 20% discount from our standard discount rate for the New Online currency, if the new merchant elects to offer our 2.0 version to their customers, as a payment option on their website. This strategy will be fueled by a marketing campaign utilizing banner ads and email opt in campaigns that target the lifestyle segment of eCommerce, in particular the online music and movie websites. The foot in the door strategy will enable to eTelcharge to gain market share in industry markets that we are seeking approval to enter, while providing supporting evidence of demand for our phone billing payment option. Finally, the third and perhaps one of the most critical marketing strategies management will employee with the guidance of our media agency is the traditional push to pull marketing strategy. eTelcharge.com’s media and ad agency will launch a public relations campaign introducing eTelcharge’s 2.0 New Online Currency as the practical solution for identity fraud and identity theft, which is the fastest growing crime of the 21 st Century. Over the next 24 month period, eTelcharge.com’s online payment solution will be demonstrated as the viable solution for the micro payment challenge of convincing the market to charge micro payments (transactions for $20 dollars and below) and position itself as the payment option for micro payments to achieve critical mass. This phase of our three prong strategy is crucial and will usher in the official launch of the 2.0 version with online merchants that have signed a three year merchant service agreement with eTelcharge.com. This will be the start of a marketing drive to become a comprehensible eCommerce solutions company addressing the real security and privacy issues of online shoppers. Furthermore, eTelcharge.com will feature these initial online merchants who have signed up to be apart of the 2.0 launch in strategic media announcements. After twelve months of gathering feed backs and results from the initial launch of the 2.0 version, management will focus on making adjustments and improvements in our initial product software developments and marketing. Extensive meetings to focus on problem areas with our first online retailers, eTelcharge will conduct online consumer interviews, enabling management to identify within the system and marketing material areas to subsequently improve. This data will be reported to AT&T for the exclusive purpose of creating brainstorming sessions to make improvements to the phone billing payment option. Once this action item is accomplished, management will move forward with vigor and dominance to market the enhancements of the New Online Currency. At this point, eTelcharge will employee the resource of utilizing any signed market affiliates, authorized agents and strategic alliance partners like Interfund Financial to market the success of the 2.0 version as an online payment solution for Internet micro payments. In addition, this phase will lead the eTelcharge.com team into positioning our system to be unveiled at industry affiliated trade shows. Press releases will be generated and distributed to the national and global media. It has been determined that we must focus on attaining low marketing cost and operating expenses. This will be a landmark step in the development of the eTelcharge.com phone billing system.
In summary, management’s marketing strategy has been formulated utilizing low cost, but recognized useful marketing tactics. Tested methods of management and development have been implemented and further refinements will be incorporated as we expand into greater market exposure. Once offered, we believe growth will continue across North America.
COMPETITION
We expect to compete with the U.S.-based multinational credit card companies as a charge option to customers electing to charge on the merchant's Web site. In soliciting merchants, we are disadvantaged by the fact that we charge the merchant more than a credit card company would for the same transactions and we also charge the merchants' customers a separate charge fee. Payout schedule to merchants for transactions charged via the telephone billing option are also restricted to longer hold periods prior to payout to merchants. Additionally, customer charges are limited to no more than $60 per month. However, we will offer a new charge option to customers of our merchants who do not have credit cards or are reluctant to use credit cards online.
We also expect to compete with two other 900 billing services, eCharge 2 and iBill, both of which are larger than etelcharge.com and offer customers similar opportunities to charge to their telephone bills online, through arrangements with 900 billing services. However, 900 billing charges through these companies are generally limited to services, rather than products, and to some digital goods offered for sale online. We believe we have a competitive advantage in that we will have developed a 900 and 800 number application that allows for the purchase of approved qualified goods offered by our online merchants. Moreover, we believe that our software is more customer friendly than our competitors' because our customer simply clicks on the eTELCHARGE icon and provides a password and e-mail address. iBill requires the customer to call a 900 number while online to obtain a special pin number to complete the transaction.
There can be no assurance that competitors will not develop software in the future that will allow them to include all merchant offered products and services for online charging. Moreover, many of our competitors are larger, better financed, have been in business longer and have significantly more working capital and more experienced personnel than we.
GOVERNMENT REGULATION
We are not directly regulated by any governmental agencies nor are we subject to statutes, rules or regulations which regulate the manner in which we do business. However, our online merchants are subject to numerous governmental regulations required of merchants in general such as truth in advertising requirements, product safety and the like. We do not believe that we would be held liable for violations by our merchants of any such government regulations or with respect to disputes between our merchants and online customers. Nevertheless, we may be named in such proceedings in which case we could be required to expend substantial fees in defending ourselves and could be liable for substantial money judgments.
EMPLOYEES
As of May 8, 2006 we have 4 full-time employees and 21 part-time employees.
Business Development
We were organized in June 1999 to provide customers of online merchants with the ability to charge their Internet purchases to their local telephone bill, rather than to a credit card. In May of 2003, the company expanded its service by offering credit card processing for online as well as offline merchants. In May of 2003, the company expanded its service by offering credit card processing for online as well as offline merchants. This move positioned the company to provide the traditional payment options such as Visa, MasterCard.
We are in the development stage and have not generated significant revenue. In the past three years the company has been funded primarily through loans from officers and shareholders.
As we are in the development stage, the initial telephone billing payment option was retired for software improvement and implementation of enhancements. These enhancements focus primarily on speed of transaction and confirmation of approved charge to customer. Once all improvements have been integrated and successfully tested the new 1.1 and 2.0 versions of the initial telephone payment option will be launched.
Initially, with the 1.0 version we targeted Internet merchants offering CDs, video cassette tapes, computer software, books, flowers and food items online to customers via their company websites, to offer our telephone billing option. Under the initial version, following an online purchase by a customer, the charge was billed on behalf of the merchant to the customer's next telephone bill. With AT&T the process was designed to provide an advance against the purchase price prior to the customer paying the telephone bill approximately 30 days after the completion of an online transaction. After deducting our fees, we would forward payment directly to our online merchant. If the charge is not paid by the customer for any reason, including a default or refusal to pay due to a dispute, AT& T would charge back its advance to etelcharge. In this event, our merchant would not receive the purchase price for the goods or services. Under our agreement with Billing Concepts Inc., Billing Concepts will advance seventy percent (70%) of the original amount determined on the first Tuesday after the sixtieth (60th) day from the date Billing Concepts receives billing records from eTelcharge.com; fifty percent (50%) of the remaining balance of the amount determined on the first Tuesday after the ninetieth (90th) day from the date Billing Concepts receives billing records from eTelcharge.com; and the remaining balance of the amounts so determined on the first Tuesday after one hundred twentieth (120th) day from the date Billing Concepts receives eTelcharge.com records. All payments to eTelcharge.com are subject to deductions from all assigned and allocated assessments and taxes charged to the Local Phone Companies.
In April 2006, The Company signed a new agreement with AT&T to bill direct again for special services such as music, video and movie downloads to the customers home phone bill. This new agreement will initially commence billing in the SW region of the United States and cover all other regions of the US in roll out phases from the SE region to the West Coast territory within AT&T markets.
The privacy and security of our billing service could be breached by third parties seeking confidential account information such as passwords and financial account information. Such a breach could subject us to liability from customers and merchants and could harm our reputation, thereby inhibiting the use of our billing service. However, since the customer only provides a telephone number, and not the information from a personal credit card or charge card, the information is less valuable. Because the maximum monthly amount of credit we allow for billing to each customer is only $60, we do not believe it likely that third parties will seek to access this information. In order to make any breach of our system more difficult, etelcharge only approves charges that originate from the customer's home computer and verifies the charge through a telephone call that must be generated from the customer's telephone number.
STRATEGY
eTelcharge.com’s target markets of the initial launch of the 2.0 New Online Currency version represent one of the top ten trends: Micro-Payments. eTelcharge.com will focus on securing its market position as the preferred online micro-payment for down loading of music, movies and satellite radio. The hottest trend for online micro purchases has been propelled by iTunes and others that sell music, videos and movies online. According to Gartner electronic micro-payments, as an industry, are estimated to generate about $60 billion in transactions annually by 2015. By focusing on the hottest markets, eTelcharge.com will distinctly positions itself with a very visible and practical billing solution. In other words, the most practical way to purchase the most sensible items purchased over the Internet is via eTelcharge.com , therefore, establishing the market stake for eTelcharge.com runs wide and deep on the Internet.
eTelcharge.com will provide along with it’s traditional payment options to online merchants a unique security and privacy feature, designed to thoroughly prevent credit card fraud and maintain the consumers anonymity, which are the top two obstructions to shopping online. Clearly, past electronic commerce solutions have not employed effective security and privacy techniques that adequately address consumer demands. This casual and simple process will revolutionize eCommerce. The revenue potential here can obviously be enormous.
In summary, as eTelcharge.com, Inc. grows; we expect to take an additional step to employ outside assistance from a marketing agency to expedite new campaigns.
MARKETING
Management has concentrated efforts in this area for the past several months and summarizes its line of thinking as follows:
eTelcharge.com will accomplish the goal of achieving profitability by utilizing a three prong marketing strategy. First, as a merchant service company we will continue to target cities, municipalities and counties to secure all offline and online transactions for payment of utilities and all fees and charges levied by these governmental entities. eTelcharge will gain market credibility with the citizens of the cities, municipalities and counties that eTelcharge provides it payment services to. Having identified this market, eTelcharge will project a growth rate of one to three new municipality or county accounts per quarter over the next twelve months, creating an established revenue stream for the company. During the second year of utilizing this strategy it is conceivable that our growth rate will double the rate of the extremely conservative first year projections within the B to G (business to government) sector. Secondly, eTelcharge.com will employ a foot in the door strategy by offering the new online currency’s 2.0 phone billing payment version when applicable to online merchants who have signed a traditional credit card processing agreement with us. Management believes that loyalty of branding by association will be created by offering an incentive of a 20% discount from our standard discount rate for the New Online currency, if the new merchant elects to offer our 2.0 version to their customers, as a payment option on their website. This strategy will be fueled by a marketing campaign utilizing banner ads and email opt in campaigns that target the lifestyle segment of eCommerce, in particular the online music and movie websites. The foot in the door strategy will enable to eTelcharge to gain market share in industry markets that we are seeking approval to enter, while providing supporting evidence of demand for our phone billing payment option. Finally, the third and perhaps one of the most critical marketing strategies management will employee with the guidance of our media agency is the traditional push to pull marketing strategy. eTelcharge.com’s media and ad agency will launch a public relations campaign introducing eTelcharge’s 2.0 New Online Currency as the practical solution for identity fraud and identity theft, which is the fastest growing crime of the 21 st Century. Over the next 24 month period, eTelcharge.com’s online payment solution will be demonstrated as the viable solution for the micro payment challenge of convincing the market to charge micro payments (transactions for $20 dollars and below) and position itself as the payment option for micro payments to achieve critical mass. This phase of our three prong strategy is crucial and will usher in the official launch of the 2.0 version with online merchants that have signed a three year merchant service agreement with eTelcharge.com. This will be the start of a marketing drive to become a comprehensible eCommerce solutions company addressing the real security and privacy issues of online shoppers. Furthermore, eTelcharge.com will feature these initial online merchants who have signed up to be apart of the 2.0 launch in strategic media announcements. After twelve months of gathering feed backs and results from the initial launch of the 2.0 version, management will focus on making adjustments and improvements in our initial product software developments and marketing. Extensive meetings to focus on problem areas with our first online retailers, eTelcharge will conduct online consumer interviews, enabling management to identify within the system and marketing material areas to subsequently improve. This data will be reported to AT&T for the exclusive purpose of creating brainstorming sessions to make improvements to the phone billing payment option. Once this action item is accomplished, management will move forward with vigor and dominance to market the enhancements of the New Online Currency. At this point, eTelcharge will employee the resource of utilizing any signed market affiliates, authorized agents and strategic alliance partners like Interfund Financial to market the success of the 2.0 version as an online payment solution for Internet micro payments. In addition, this phase will lead the eTelcharge.com team into positioning our system to be unveiled at industry affiliated trade shows. Press releases will be generated and distributed to the national and global media. It has been determined that we must focus on attaining low marketing cost and operating expenses. This will be a landmark step in the development of the eTelcharge.com phone billing system.
In summary, management’s marketing strategy has been formulated utilizing low cost, but recognized useful marketing tactics. Tested methods of management and development have been implemented and further refinements will be incorporated as we expand into greater market exposure. Once offered, we believe growth will continue across North America.
COMPETITION
We expect to compete with the U.S.-based multinational credit card companies as a charge option to customers electing to charge on the merchant's Web site. In soliciting merchants, we are disadvantaged by the fact that we charge the merchant more than a credit card company would for the same transactions and we also charge the merchants' customers a separate charge fee. Payout schedule to merchants for transactions charged via the telephone billing option are also restricted to longer hold periods prior to payout to merchants. Additionally, customer charges are limited to no more than $60 per month. However, we will offer a new charge option to customers of our merchants who do not have credit cards or are reluctant to use credit cards online.
We also expect to compete with two other 900 billing services, eCharge 2 and iBill, both of which are larger than etelcharge.com and offer customers similar opportunities to charge to their telephone bills online, through arrangements with 900 billing services. However, 900 billing charges through these companies are generally limited to services, rather than products, and to some digital goods offered for sale online. We believe we have a competitive advantage in that we will have developed a 900 and 800 number application that allows for the purchase of approved qualified goods offered by our online merchants. Moreover, we believe that our software is more customer friendly than our competitors' because our customer simply clicks on the eTELCHARGE icon and provides a password and e-mail address. iBill requires the customer to call a 900 number while online to obtain a special pin number to complete the transaction.
There can be no assurance that competitors will not develop software in the future that will allow them to include all merchant offered products and services for online charging. Moreover, many of our competitors are larger, better financed, have been in business longer and have significantly more working capital and more experienced personnel than we.
GOVERNMENT REGULATION
We are not directly regulated by any governmental agencies nor are we subject to statutes, rules or regulations which regulate the manner in which we do business. However, our online merchants are subject to numerous governmental regulations required of merchants in general such as truth in advertising requirements, product safety and the like. We do not believe that we would be held liable for violations by our merchants of any such government regulations or with respect to disputes between our merchants and online customers. Nevertheless, we may be named in such proceedings in which case we could be required to expend substantial fees in defending ourselves and could be liable for substantial money judgments.
EMPLOYEES
As of May 8, 2006 we have 4 full-time employees and 21 part-time employees.
