And the Winner Is...?
October 15, 2007 – A slew of companies and payment products are quietly (or not so quietly) marching onto the established payments world. PayPal, Bill Me Later, Google Checkout, Amazon, Tempo, Moneta, Revolution… and surely more to come. The traditional frontier has been e-commerce but many are now breaking out in the physical world with a low cost merchant value proposition. Increasingly, these companies are coming in with strong VC backing, an experienced management team and a well crafted business plan. While the challenges of developing an issuance base, an acceptance network and a brand cannot be underestimated, the ongoing shift to electronic payments creates an attractive market and traditional players should not dismiss the newcomers lightly. Consider PayPal that started as a person-to-person e-mail money transfer service that now owns a bank in Europe and is establishing a presence in the airline segment (US Air and Northwest). Or, Bill Me Later that offers transaction level credit at an e-commerce site and is now considering a foray into the retail POS space. Bill Me Later is also a payment option for US Air and AirTran. And, Moneta has just acquired the Retail Payments (RPS) product from CheckFree. Even Western Union is getting into the game with some airlines. It is interesting to note that the startups are not building new infrastructure—they are merely leveraging the established ACH and card networks with more smarts. One is certain to make a breakthrough.
Posted by Ali Raza on Monday, October 15, 2007