challenge online payment giants
Moneta, a new payments company, regards non-credit online
purchases as a potentially lucrative niche, and has positioned
itself as a gateway for payments accessing consumer’s cheque
accounts when shopping via the internet. It has started offering a
payment system for online purchases that uses only automated
clearing house debits, while offering merchants lower transaction
fees.
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Consumers who register with Moneta are provided with a four-digit
PIN that is used to complete all purchases, eliminating the
security concerns most consumers have about submitting sensitive
personal information over the internet. Consumers can also log on
to their accounts and quickly change the bank account that funds
their Moneta transactions.
Direct transfers
To further bolster its processing platform, the company recently
announced that it has acquired the Retail Payments Service (RPS)
product from payments services provider CheckFree. The RPS
technology allows consumers to purchase goods and services by
transferring money directly from their checking accounts to
participating merchants.
In a statement released by CheckFree’s vice chairman, Mark Johnson,
he said he sees the sale of RPS as a unique opportunity for his
company and Moneta. “With a targeted focus on online retail
payments, Moneta has an excellent opportunity to increase the
number of websites where consumers can pay online using their
checking accounts. CheckFree will continue to process payments made
using the Moneta retail payment service, and we are looking forward
to working with them to provide a convenient and secure online
payment option,” he said.
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By GlobalDataThis simplified process eliminates a large portion of the fees that
merchants assume with traditional purchases made on credit cards
and through other online payment providers. RPS has been a
fast-growing CheckFree service offering for more than two
years.
Under the terms of the acquisition agreement, all customer accounts
and CheckFree employees who support the RPS product will transfer
to Moneta. CheckFree will continue to partner with Moneta and
provide payment processing.
“Consumers who want to pay for online purchases using a traditional
bank account will enjoy the convenience of this service,” said Hans
Zandhuis, president of Moneta. “Having one place to change payment
method information overcomes the major hassles consumers experience
when their credit card expires or their banking relationship
changes and they need to update dozens of merchant sites with new
account information. The consolidated location of financial
information also makes managing money much simpler for the average
consumer.”
Moneta has already established relationships with several major
airlines and the RPS technology that it has acquired from CheckFree
will allow Moneta to expand its position within the travel industry
and among all online and traditional merchants.
It is marketing the programme as a cost-cutting move for merchants
and as a fiscal discipline measure for consumers. The system is
similar to internet search engine company Google’s Checkout,
because both hide payment details from merchants, although Checkout
allows people to use credit cards.
New trends in online security
Moneta joins a number of other companies offering online payment
systems that do not require customers to disclose a card number.
MasterCard, online auction company eBay’s PayPal unit, and card
issuer and payments processor Discover Financial Services are among
the customers of Orbiscom, an Ireland-based company that lets
consumers generate one-time-use card numbers for online
purchases.
MasterCard recently announced a major deal with Orbiscom to
introduce several security and processing capabilities, with
one-time use cards a key feature of the offerings. Orbsicom and
MasterCard will jointly develop a payments processing platform that
would let issuing banks quickly develop and offer various new types
of cards and services. The new platform, MasterCard inControl,
would let issuers and customers control the types of merchants at
which their cards may be used, set spending limits and even place
restrictions on the time of day the cards may be used.
A key feature of MasterCard inControl will be Orbiscom’s
one-time-use card number technology, which other card companies
already use to add security by creating a transaction number for
online purchases. This lets cardholders avoid sending their actual
account numbers across the internet.
Moneta, on the other hand, is positioned as an alternative to Visa
and MasterCard-branded debit. On the Moneta website, the company
explains that while “using a debit card with a MasterCard or Visa
emblem requires that you type in your card number, expiration date
and security code every time you make a purchase”, using Moneta
“allows you to avoid entering personal payment information every
time. All you use is your Moneta account ID (which can be the same
as your e-mail account) and a four-digit PIN.”
“The process that exists now is unnecessarily costly for both the
consumer and the merchant,” Zandhuis said. “We want to give all
consumers another option so that they can get the goods and
services they want without worrying about security or falling into
debt.”
The payments are processed by CheckFree and routed through the
Federal Reserve Board’s FedACH service, Moneta says on its website.
The company invited CheckFree users by e-mail to enrol in the
system.
Several online merchants accept Moneta, including Aloha Airlines,
AirTran Airways, ShoeBuy.com and electronics retailer
TigerDirect.com. Moneta wants to sign up other merchants in the
travel industry, and it plans to offer other products and services
to address online and offline payments in the coming months.
The start-up hopes that its lower merchant costs and debit-only
appeal will find it a space in the increasingly crowded online
payments market.
