Doxo Takes a Bite out of PayPal…

Paying and getting paid sans paper is getting easier.

Seattle-based startup Doxo, which counts Amazon.com’s Jeff Bezos as an investor, has created an online billing and document management tool that aims to help consumers and small businesses pay and get paid, faster and cheaper.

In June, the less than 40 person company, with roughly $15.2 million in total raised capital, brought Doxo out of private beta and then launched a new iPhone app. Both of which caught my eye.

Admittedly, Doxo is relatively young and not at all a household name, as only a few large companies like Sprint and Puget Sound Energy use the full service. And while a proper review must wait for some deeper testing, Doxo already offers reasonable enough small-business value propositions to merit an early look. 

What is it: Doxo is a business-payments tool with a digital file storage cabinet and relationship management application bolted on. So not only can you track and store your payments, you can keep tabs on whom you’re paying, too. The free-to-consumer service runs on an easy-to-use Web-based dashboard. Log in, create an account and start uploading credit-card bills, utility bills, health-care forms and the like.

From there, you can view service updates, exchange notices and customer-service queries. And, if both parties wish, bills can be delivered — and even paid — all without stuffing a single envelope.

Why you might like it: No question, Doxo offers about as simple a means for tracking personal billing information and storing data securely as there is on the Web. The service is worth using as an online-storage tool alone.

But a bigger upside lurking for small firms? The payment option, DoxoPay. If my clients choose, I can arrange for them to electronically pay me using Doxo. The company declined to comment on specific transaction fees, saying the market is changing so fast that firm pricing models have not emerged.

“I can say that a small business is able to send a bill and collect payment for less than half of a typical PayPal transaction,” says Steve Shrivers, Doxo’s CEO.

Why you might not like it: Doxo is interesting, but a long road lies ahead. There are a limited number of paperless providers. So, as a payment platform it does not have the reach of say a PayPal. And many bills, at least in my testing, were not available electronically. I had to scan or photograph or otherwise upload them by hand, which was no faster than paying by traditional paper and check.

And then there are the security issues. Here, yet again, is another small startup that seeks to glean, track and control a simply jaw-dropping level of personal information. Doxo execs have taken steps to be as secure as any online firm. But the fact remains, they are an unproven small entity that may not be around tomorrow.

Bottom line: For a simple, no-cost back-up solution, Doxo is a good choice. And if you are adventurous and looking for payment alternatives in your shop, the tool is worth a test drive.

What PayPal alternative have you tested out? Let us know in the comments section.