Interview with Ray Parsons, Transcepta

Ray Parsons is CEO of Aliso Viejo-based Transcepta (, an angel-backed company that is tackling the electronic bill payment market for businesses. I spoke with Ray about his firm, its hosted service model, and what it offers to businesses.

Ben Kuo: Tell me a bit about Transcepta and what the firm does?

Ray Parsons: Most consumers have been receiving and paying bills electronically for a while now. In fact, the number of electronic consumer payments exceeded checks for the first time in 2005. By contrast, over 80% of business-to-business invoices and payments still occur via paper and postal mail. Transcepta solves that problem by providing a simple, secure mechanism for businesses to send invoices and receive payments electronically.

Transcepta provides a hosted service that is easy for our customers to implement. Basically, we pretend to be a printer. Instead of printing invoices to a traditional hard copy device, our customers direct their invoices to the "Transcepta printer." This printer transmits the invoices to our data center, where we convert them into email messages. The payer receives the invoice information in the body of the email, along with a PDF in case they want to print it out. The invoice also has a link which takes the payer to a portal. There, the payer will see all outstanding invoices. The payer can check which ones they want paid and when. Once the payment is sent, Transcepta provides confirmation to both parties.

BK: What kind of customers are you targeting with your system?

RP: Really any business that sends 1,000 or more invoices per month will see significant benefit by using Transcepta's services. In addition, companies who use lock boxes for payments or who have customers that pay by credit card will save a lot of money with our service. Finally, customers that experience payment reconciliation issues or want to increase cash flow efficiency should definitely take a look at our service.

BK: What's the advantage over the normal invoicing process that businesses use?

RP: Today, invoicing is manual and paper intensive in most cases. If it is automated it requires lots of upfront investment from both a dollar and time perspective. Implementing Transcepta's service takes less than a day, requires no integration, and requires no upfront cash. So risk is negligible. Plus, the transactional costs of Transcepta are minimal. For example, we charge 29 cents per electronic invoice. That's less than the cost of a stamp. When you compare our service to the cost of existing processes, we typically come out way ahead.

BK: How does this work with the existing accounting/invoicing software that a company might have, say Quickbooks at the low end, or SAP at the high end?

RP: Great question. This is actually a very big differentiator. Customers are not required to change their existing processes at all. They simply print their invoices out of their existing systems, like the ones you mention. But when the customers print the invoices, they print to our virtual printer. We pick up the invoices and take care of the routing. If customers do want payment information imported back into an accounting system, we can do that as well.

BK: Let's talk a bit about your funding. Who is backing the company?

RP: We raised some seed money about a year ago, and then received a substantial investment from angel investors back in December, 2005. The largest investment came from Tech Coast Angels. We'll likely do a Series B round later this year.

BK: How far along are you in terms of life cycle--is your system available yet, and have you signed up customers?

RP: We have a beta program launching this July and we do have customers signed up. We're still taking customers, but will have to start turning folks away soon. We are capping the number of beta customers so that we can manage each customer in a very high touch way. We want to get a lot of feedback and make sure each customer feels great about participating in beta. If customers are interested in participating in Beta they can send an email to or visit our website at

BK: Thanks for the interview!


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