The primary goal of this research was to determine if Micronotes, a start-up company based on an electronic bill-pay service that enables customers to prepay and discount their bills, is a viable business proposition. Here is how Micronotes works: On April 15th, a customer receives a $1,000 insurance bill due on May 15th. She enters the bill amount and due date into the Micronotes server, accessible via cell phone, handset, or the internet, and determines that she can pay Micronotes $996.12 today to settle that bill and Micronotes will pay her $1,000 bill, in full, on May 15th. Micronotes aggregates her $996.12 payment on April 15th with millions of other customer payments, and invests it into short-term, low-risk, institutional-grade securities which mature just before the due date of her bill; Micronotes then pays her $1,000 insurance bill on May 15th. The idea is to get people to think about paying bills incrementally earlier as a discount opportunity, rather than a burden to avoid - and by doing so, create perfect ontime payments for customers which will eliminate late fees, yield higher credit scores, and ultimately lower credit costs. The research design comprised qualitative and quantitative market research to understand the level of customer interest in the concept, creation and maintenance of customer trust, the firm's system of innovation as a competitive advantage, the regulatory and tax environment in which this business will operate, system and financial modeling to understand business drivers and sensitivities, market timing, international expansion, and routes to liquidity for investors.
