Alternative Online Consumer Payments: Banks and Merchants Weigh a Host of New Options
Javelin Study Evaluates How Well Emerging Vendors Solve Online Transaction Needs
SAN FRANCISCO--(BUSINESS WIRE)--Javelin Strategy & Research (www.javelinstrategy.com) today released a report that evaluates providers of alternative payment solutions for online retail transactions. The report, Predicting Alternative Payments Vendor Success: Balancing Needs Among Banks, Merchants, and Consumers (http://www.javelinstrategy.com/lp/AlternativePaymentsBrochure.html), reviews the rates and the value of services provided by nine vendors.
"Several emerging methods are strong at balancing the needs of banks, merchants and consumers, which historically predicts success in new payment methods. None of the solutions are perfect, yet we found many vital differences among those we analyzed," said Mary Monahan, Managing Partner and Research Director.
Included in the report are vendors with some level of emerging status (eliminating vendors such as PayPal and BillMeLater), as well as some level of financial-institution orientation (eliminating Revolution Money). Vendors evaluated include Acculynk, eBillme, HomeATM, Mazooma, Moneta, NACHA SVP, Noca, SeerGate, and Verient.
Key Findings from the Report Include:
- The three vendor solutions that come closest to widespread success are those offered by Acculynk, eBillme and Moneta – with Verient’s platform finishing close behind.
- Many former alternatives for online retail transactions are quickly going mainstream.
- Emerging payment methods from traditional payment providers have the advantage of trusted brands and established networks for issuance, acceptance and processing.
- To retain and grow valuable customer relationships, financial institutions must offer dynamic, alternative payment solutions that meet consumer, merchant and bank needs.
"Financial institutions are faced with increasing competition from non-financial institution payment brands, such as PayPal, that seek to usurp transaction volume, particularly online," said Bruce Cundiff, Director of Payments Research and Consulting. "As consumers shift from credit cards to various forms of ‘pay-now’ methods, financial institutions must offer new payment methods to remain the primary and all-around trusted financial provider."
About Javelin Strategy & Research
Javelin is the leading independent provider of quantitative and qualitative research focused exclusively on financial services topics. Based on the most rigorous statistical methodologies, Javelin conducts in-depth primary research studies to pinpoint dynamic risks and opportunities. Javelin helps its clients achieve their initiatives through three service offerings, including syndicated research subscriptions, custom research projects and strategic consulting. Javelin’s client list includes some of the largest banks, credit unions, card issuers, and technology enterprises in the financial services industry. For more information about this or other Javelin reports, please visit www.javelinstrategy.com/research or contact Elizabeth Travers at
(925) 225-9100
ext 31 or at etravers@javelinstrategy.com. Contacts
Javelin Strategy & Research
Elizabeth Travers,
925-225-9100 ext. 31etravers@javelinstrategy.com
Permalink: http://www.businesswire.com/news/google/20090623005407/en
5comments:
- "In fairness, it should be noted that Javelin Strategy and Researchand Acculynk have a business relationship (i.e. cash has exchangedhands) which, in this bloggers "opinion" more than likely skews theirobjectivity at least a lil' bit."
-Not sure how this skewsobjectivity. It seems to me Javelin has always reported on implicationsof actual data. It seems to me you have to understand the data andresearch methodology to make your own assumptions. If we throw out allresearch companies who service the industry for a fee, I guess we'releft with...hmm. I not actually sure who we're left with. Maybe agovernment agency or a fed bank report. My only point is to look at thedata and how conclusions are derived. Statistically significantfindings are indeed findings, whether you like the results or not. - June 23, 2009 9:07 AM
It's not that I don't like the results. It's that I am using aneducated guess to decipher what the results were based on. The truthis, most research companies, or analysts agree that if you "type" yournumber into a box on a website, it will get hacked. It is not it "might gethacked"...it WILL. So, with that said, I don't know how well the vendorin question "solves" online transaction needs, when their solution"requires" first, for the consumer "type" their card number into a box(as per usual) before they inherently admit that doing so is not safe...and then lock the keyboard to ensure that consumers do NOT use it, to enter their PIN. I don't think my imagination isrunning away with me when I project that intercepting mouse clicks, viascreen scrapers, or mouse-logging is going to be that difficult of atask for sophisticated hackers to figure out. My point isn't that Idon't LIKE the results. My point is that they don't make sense. Settingup consumers to have their PIN codes hacked is not, in my mind,"solving transaction needs."
You have to admit, that much is true.
Onthe flip side, if the report was entitled, Javelin Study Evaluates HowWell Emerging Vendors "CONVENIENTLY" Solve Online Transaction Needs,then I might agree with their findings. It is less convenient to get aPCI 2.0 Certified Device into the hands of the consumer than it is to simplyvisit a website that downloaded the vendors API. . But part of theproblem, (the part that hackers love) is that pushing "convenience"over "security" won't work in the long run.
Thanks for taking the time to anonymously comment! - JBF- June 23, 2009 10:20 AM
I will not anonymously comment, as I wrote the Javelin report (andhave had minimal interaction with Acculynk as a Javelin client). Iwould like to address the accusations of bias and influence directly.
Thereport I wrote was based on independently gathered information andconsumer data on various solutions, with the primary criterion forefficacy of a solution being the balance of value that said solutionprovides for
the constituents in an online retail transaction: financial institutions, merchants, and consumers.
Secondly,you cannot separate convenience and security. Consumer usability wasABSOLUTELY part of my analysis, and I make no apologies for it.
Itis very easy to have zero fraud. Have zero transactions. Elegantsolutions take both the reality and the perception (consumer andotherwise) issues associated with security into account, effectivelybalancing the two. Leading (and ending) with a message that is basedsolely on "better security," and one that marginalizes and ignoresconsumer usability is a path fraught with peril.
Thanks forcommenting on the press release for our new report and linking to oursite. Please let me know if you have any additional questions aboutthis or our other research.- June 23, 2009 4:39 PM
- Bruce Cundiff stated above that It is very easy to have zero fraud with zero transactions. I couldn't agree more. That said, We've done 80K + transactions with zero fraud. Over $7M in dollars. All verifiable with eFunds.
- June 23, 2009 9:01 PM
Bruce,
I love America and I especially love the Internet because it disintermediates us all so elegantly and swiftly.
I'velong followed your thoughts on ecommerce and highly respect yourconsidered thinking, writing, and speeches on same. However, as to yourlatest report Predicting Alternative Payments Vendor Success I mustmake some comments and please bear in mind that John Frank and MitchellCobrin speak for themselves just as I do here.
As you correctlystated, with zero transactions you will have zero fraud. However Itrust you are willing to look at hard data which we will happilyprovide and validate through eFunds that from January 2008 through May2009, HomeATM ran over 80K PIN transactions totaling over 7M inprocessing with ZERO fraud or breach and no biased users.
Oursole purpose in running said transactions was to prove that our systemwas impervious to malware, phishing, man-in-the-middle attacks, and anyother method of hacking. It may (or may not) interest you that in the1990's I was personally preaching, writing patents, and raising moneyand awareness that music and video would inevitably be compressed,captured and redistributed freely on the web.
While I wastechnically correct, I could never convince the entertainment industrythat THEY had a problem and my business and personal fortune dissolved.
Imorphed my thinking to financial transactions and I say this with alldue respect to your obvious understanding that while the music industryin it's very best year did 15B in sales, that much money is moved everyhour on the Internet.
Is HomeATM the easiest ecommerce solution?Absolutely not. Do we have challenges getting our PIN entry devicesdistributed ubiquitously, absolutely. But I will give you a freeprediction analogous to the one I gave executives at Warner, Sony, RCA,etc. There will be a Napster of personal information where I can go toget your SSN, mother's maiden name, and or any other plastic card andidentity information you posses... unless said data is encrypted WITHhardware AT the point of data entry. I promise.
kgm
Chairman/CEO
HomeATM ePayment Solutions
"In fairness, it should be noted that Javelin Strategy and Research and Acculynk have a business relationship (i.e. cash has exchanged hands) which, in this bloggers "opinion" more than likely skews their objectivity at least a lil' bit."
-Not sure how this skews objectivity. It seems to me Javelin has always reported on implications of actual data. It seems to me you have to understand the data and research methodology to make your own assumptions. If we throw out all research companies who service the industry for a fee, I guess we're left with...hmm. I not actually sure who we're left with. Maybe a government agency or a fed bank report. My only point is to look at the data and how conclusions are derived. Statistically significant findings are indeed findings, whether you like the results or not.
It's not that I don't like the results. It's that I am using an educated guess to decipher what the results were based on. The truth is, most research companies, or analysts agree that if you "type" your number into a box on a website, it will get hacked. Not it "might get hacked"...it WILL. So, with that said, I don't know how well the vendor in question "solves" online transaction needs, when their solution "requires" first, for the consumer "type" their card number into a box (as per usual) before they inherently admit that doing so is not safe, by locking the keyboard to ensure that consumers does NOT use the keyboard, to enter their PIN. Now, I don't think my imagination is running away with me when I project that intercepting mouse clicks, via screen scrapers, or mouse-logging is going to be that difficult of a task for sophisticated hackers to figure out. My point isn't that I don't LIKE the results. My point is that they don't make sense. Setting up consumers to have their PIN codes hacked is not, in my mind, "solving transaction needs."
You have to admit, that much is true.
On the flip side, if the report was entitled, Javelin Study Evaluates How Well Emerging Vendors "CONVENIENTLY" Solve Online Transaction Needs, then I might agree with their findings. It is less convenient to get a PCI 2.0 Certified Device into the hands off the consumer than to simply visit a website that downloaded the vendors API. But part of the problem, (the part that hackers love) is that pushing "convenience" over "security" won't work in the long run.
Thanks for taking the time to anonymously comment! - JBF
I will not anonymously comment, as I wrote the Javelin report (and have had minimal interaction with Acculynk as a Javelin client). I would like to address the accusations of bias and influence directly.
The report I wrote was based on independently gathered information and consumer data on various solutions, with the primary criterion for efficacy of a solution being the balance of value that said solution provides for
the constituents in an online retail transaction: financial institutions, merchants, and consumers.
Secondly, you cannot separate convenience and security. Consumer usability was ABSOLUTELY part of my analysis, and I make no apologies for it.
It is very easy to have zero fraud. Have zero transactions. Elegant solutions take both the reality and the perception (consumer and otherwise) issues associated with security into account, effectively balancing the two. Leading (and ending) with a message that is based solely on "better security," and one that marginalizes and ignores consumer usability is a path fraught with peril.
Thanks for commenting on the press release for our new report and linking to our site. Please let me know if you have any additional questions about this or our other research.
FYI: It is very easy to have zero fraud with zero transactions. Agreed. That said,
We've done 80K + transactions with zero fraud. Over $7M in dollars. All verifiable with eFunds.
JBF
Bruce,
I love America and I especially love the Internet because it disintermediates us all so elegantly and swiftly.
I've long followed your thoughts on ecommerce and highly respect your considered thinking, writing, and speeches on same. However, as to your latest report Predicting Alternative Payments Vendor Success I must make some comments and please bear in mind that John Frank and Mitchell Cobrin speak for themselves just as I do here.
As you correctly stated, with zero transactions you will have zero fraud. However I trust you are willing to look at hard data which we will happily provide and validate through eFunds that from January 2008 through May 2009, HomeATM ran over 40K PIN transactions totaling over 7M in processing with ZERO fraud or breach and no biased users.
Our sole purpose in running said transactions was to prove that our system was impervious to malware, phishing, man-in-the-middle attacks, and any other method of hacking. It may (or may not) interest you that in the 1990's I was personally preaching, writing patents, and raising money and awareness that music and video would inevitably be compressed, captured and redistributed freely on the web.
While I was technically correct, I could never convince the entertainment industry that THEY had a problem and my business and personal fortune dissolved.
I morphed my thinking to financial transactions and I say this with all due respect to your obvious understanding that while the music industry in it's very best year did 15B in sales, that much money is moved every hour on the Internet.
Is HomeATM the easiest ecommerce solution? Absolutely not. Do we have challenges getting our PIN entry devices distributed ubiquitously, absolutely. But I will give you a free prediction analogous to the one I gave executives at Warner, Sony, RCA, etc. There will be a Napster of personal information where I can go to get your SSN, mother's maiden name, and or any other plastic card and identity information you posses... unless said data is encrypted WITH hardware AT the point of data entry. I promise.
Thanks for reading my rant and have a great weekend,
kgm
Chairman/CEO
HomeATM ePayment Solutions
http://www.HomeATM.net
Chicago: (847) 380-4930
Hong Kong: +852 8120 3527
"We guarantee your data beginning to end."
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