The first seemed natural to me, as ecommerce frees retailers from geographic boundaries.

The second theme, the promotion of the echeck as a payments mechanism, surprised me at first, given that the technology is hardly new. It also delighted me because I prefer echecks to credit or debit cards as a web-based payment mechanism and do not find that it’s often available.

I did not make a complete tour of every payment vendor at the show, but here’s a rundown of the vendors I visited and conversations we had.

International Payment Options

When I mentioned to Allyson Stramotas, a marketer for Digital River, that a number of vendors were talking to me about international payments, she assumed I must have heard a lot about China. I had not, though I later found in my conference bag a card presenting the statistics for Alipay, China’s leading third-party electronic payment service. Geographically, a number of vendors pointed out their capabilities for Latin America in general and Brazil specifically.

For instance, Cobre Bem, based in Brazil, provides a PCI-compliant gateway to Brazilian and Latin American banks, providing connections to more than 80 different financial institutions and bank card organizations in Latin America. For its part, Digital River World Payments covers Latin America and Asia in its white paper “Online Payments in the BRIC Countries.”

Other international payments processors I talked to included Moneris Solutions, a joint venture between Royal Bank of Canada and the Bank of Montreal, which partners with BMO Harris in the United States. Moneris provides a whole suite of payment options, including loyalty programs and echecks, for retailers. They stressed the completeness of their solutions across all needs, from store to web to company accounting.

Payza and Order Bridge showed payment platforms. Payza, with an international gateway, presented an ewallet service that can be loaded through bank transfers, wires, credit cards, and other means, allowing you to both make and receive payments. Order Bridge seeks to make it easier to integrate a wide variety of payment, risk-management, and transaction tracking options into a merchant’s website.

2CheckOut exhibited its online payment processing service that integrates a merchant account and payment gateway in a single package, another way of making it easier for retailers to accept online payments. The 2CheckOut shopping cart seeks to open retailers to international customers by presenting international currencies upon checkout, which also supports 15 different languages. It does not require shoppers to create a separate payment account.

Several other vendors emphasized supporting international payment and currency options directly on a retailer website. JCB, a Japanese payment card, wants merchants to accept the card and display its logo on their websites and in their stores. “Japanese consumers love American goods,” said sales rep Charles Spatola. Providing a payment option they know and use will increase the likelihood of making the sale.

Planet Payment made a similar case for international currency support. The company provides in-store and ecommerce payments processing in international currencies so that shoppers can use their local credit cards at a store’s point of sale or see their currency symbol on the website. They receive a guaranteed exchange rate upon checkout, and Planet Payment ensures that it’s lower than other options, as a reason for the customer to buy more goods at the foreign exchange rate.

PacNet Services Ltd., however, impressed me with its comprehensive international payments processing. They did it with the most impressive piece of collateral from an educational point of view: the World Payments Guide 2011, a 720-page reference book and online guide to banking systems and consumer payments in every country in the world, including an explanation of PacNet capabilities.

Echeck Options

The cost of payments filtered into the general media last year with the Durbin Amendment, which directed the Federal Reserve to place limits on the fees banks can charge for debit-card payments. For many years, credit- and debit-card processing fees have been roughly the same for retailers, regardless of who does the processing.

I believe that the increased promotion of echecks, an option that has been around for seven years, is driven in some way by today’s post-Durbin environment, in which transaction processing fees are no longer a standard three-plus percent. Electronic checks, which process as low-cost ACH transactions, provide lower transaction costs and can provide yet another option for consumers.

First Data argues as much in the latest version of an echeck white paper, which the payments processor provided at IRCE, “Electronic Checks: The Low-Risk, Low-Cost Way to Accept Online Payments.”

ACHFederal stressed the low cost and customer convenience of echecks. I agreed, as I prefer to pay by electronic check when it’s offered by a merchant, which it generally is not.

Payment fraud also arose as a topic of conversation, especially at the Authorize.Net booth. The company’s parent firm, CyberSource, estimates that merchants lost some $3.4 billion to fraud in 2011.

Finally, my favorite payments vendor of the show was Wipit, a service that allows online merchants to serve people without bank accounts (generally known as the “unbanked”). Unbanked customers use mobile devices that they load up at currency exchanges and mobile phone stores, explained Ian Williams, manager of business development.

Wipit allows them to open an account that they can add cash to in the same way. When they buy on the web, they choose the Wipit icon and pay from their Wipit account. The company has received a lot of attention since its founding in 2010, in part following FDIC concerns for the unbanked.

Whether it’s accepting cash, international payments, or echecks, the vendors face a common challenge: getting their logo for their payments option on a retailer’s website. That, in turn, depends on whether retailers believe that they can use payments channels to open new markets, increase sales to existing customers, or make paying at online checkout so easy that the customer rarely abandons the transaction.

ERI and the Customer Transfer Plus (CTP) messages allow corporate originators of wire transfer payments to include up to 9,000 characters of remittance information within each message. The goal is to make end-to-end processing easier.

On May 23, Michael Bosacco of SunGard and Stephen Wojciechowicz of HSBC presented “Extended Remittance Information (ERI): Lessons Learned and the Way Forward” at the New York Treasury Management Association’s conference. In discussing early returns and the future global prospects for ERI, the two treasury management professionals report that ERI “has provided corporate clients with a mechanism to shorten the cash clearing cycle.”

Earlier in the month, Ken Isaacson, vice president at the Federal Reserve Bank of New York, presented an introductory session on ERI at FUSION 12, a service management conference with an IT focus. The presentation concentrated on the potential benefits of new remittance capabilities. In April, just two months prior, Isaacson and Wojciechowicz also gave the “Lessons Learned & the Way Forward” presentation at NACHA’s Payments 2012 conference.

As ERI begins to make its appearance on conference programs, it is also beginning to show up as a service on websites. J.P. Morgan offers a podcast about ERI on its website to educate corporate customers on the benefits, as well as an ERI FAQ.

The Federal Reserve Banks have been promoting ERI and the CTP message to its bank customers in its FedFlash newsletter. In “Extended remittance information now available via the Fedwire Funds Service”, published in mid-April, the Fed advises, “Consider how your institution can use the new CTP message to provide value-added services to your corporate customers, which could help to increase or preserve your wire volume. . . . Initiate a conversation with your customers on their pain points and how your institution can help introduce process efficiencies with extended remittance information options.”

There’s a long way to go. The other ERI presentation given by Bosacco and Wojciechowicz at the June 7, 2012, Windy City Summit in Chicago is titled, “The Untapped Potential of ERI .” Download the presentation slides for a good overview of ERI and its uses.

When we got to the New York State Thruway, I pulled into the cash-only lane, only to find that my Illinois I-Pass electronic toll transponder paid my fare. I don’t recall that ever happening. I remember that on the last trip, I pulled out my cash in New York, as I had done in Ohio on our first trips.

On this trip, it was electronic toll collection from end to end, beginning at the Chicago Skyway, to the Indiana Toll Road, across Ohio on its turnpike, and then into New York. (We took the northern route this time and skipped the Pennsylvania Turnpike, which is considering a plan to move to all-electronic toll collection.)

All of those states are now members of E-ZPass Group, an association of 24 toll agencies in 14 states. E-ZPass says it’s “the world leader in toll interoperability, with more than 22 million E-ZPass devices in circulation.” The E-ZPass usage statistics show a nearly 22 percent increase in E-ZPass transactions from 2005 through 2011. E-ZPass is not a universal electronic toll collection system, however.

From a consumer point of view, system interoperability (in this case, the ability to use one system on multiple toll roads) is wonderful because it saves time with faster toll paying and decreased traffic congestion. “E-ZPass has shaved at least seven billion traffic-jammed hours from our collective lives,” writes David Segal in a May 19, 2012, New York Times article. The U.S. General Services Administration, in its electronic tolling portal, adds that the systems also “increase fuel economy and reduce vehicle emissions by reducing the time spent in lines at toll booths.”

As in many areas of epayment, the U.S. may have spawned the technologies first but adopted them later. I recall the first electronic tolling system I came across when driving outside of Toronto, Canada, back in 1998. There is a decent, if uneven, overview article on electronic toll collection, its uses, and history across the world on Wikipedia, which also has an article covering the history of E-ZPass. For information on electronic toll technologies, visit Transcore, one of the world’s largest providers of electronic toll collection and other transportation systems.

There are problems, of course. Segal’s article carries the title “Trouble at the Tollbooth”. It focuses on a $50 E-ZPass fine that a woman received in the mail. She thinks the fine is unfair, and she doesn’t appreciate the company’s tone one bit.

We experienced something similar, though it resulted only in inconvenience. We did not have our I-Pass transponder once while driving the Indiana Toll Road and accidentally got in the wrong lane. Although we were able to pay by debit card in the noncash lane, the instructions on the card reader were vague and required a call to the toll attendant, who had to manually enter my debit card number into her terminal and raise the gate for us.

In addition to interoperable transponder-based systems, multiple and reliable methods of epayment at toll booths will be required to make toll payment even faster and easier.

New mobile technologies also captured media and consumer attention. Google launched a mobile-based payment system, called Google Wallet, which eventually will allow you to make payments by waving your smart phone over a payment device. The Chicago Transit Authority’s new fare collection system will accept this technology in 2013.

At the same time, interest in making international payments more efficient and less costly increased. Indeed, the importance and use of cross-border, international payments are expected to grow, according to a March 2011 survey conducted by the Federal Reserve Banks. International payments are often difficult and expensive because of differences in bank messaging formats and networks, as well as foreign exchange considerations.

The survey of financial institutions shows that two-thirds of all respondents process cross-border transactions today, as compared to only one-third in 2009. Half of all cross-border payments are B2B, with most made by wire transfer. Lower cost automated clearinghouse (ACH) transfers grew at the fastest rate, with a 19% increase in usage.

The Federal Reserve Banks introduced a change to its wire transfer system to make wire transfers easier for businesses to track payments and the invoices they cover. The changes are also designed to more closely align U.S. wire transfers with SWIFT, the international system for bank and payments communication. In November of last year, the Fed introduced extended remittance information for wire transfers, allowing companies making payments to add remittance information to a wire transfer payment so that the recipient can see what the payment covers.

The new feature had been in the works for nearly five years, beginning with research that shows potential cost savings of 40% to 60% in processing, as the relationship between payment amount and invoices paid is easier to track and can be reconciled automatically. Originally intended for U.S. use, the inclusion of remittance information in wire transfers will help international payment identification as well. “We thought the need was unique to the U.S. but are seeing worldwide need for more remittance data in payment structures,” says Lauren Hargraves, senior vice president, Federal Reserve Banks.

The new remittance information is compatible with the international payment standard ISO 20022. International payment messages, including the widely used SWIFT payment messages and the developing SEPA instruments, are migrating to or are based on ISO 20022. SEPA refers to the Single European Payments Area, an initiative to harmonize payments throughout Europe.

SEPA will bring about changes in the way payments are made throughout Europe relatively soon, as the European Commission in November set a deadline for banks to migrate electronic credit transfers and direct debits to SEPA instruments by February 2014. The French National SEPA Committee Secretariat, citing statistics from the Association Française des Trésoriers d’Entreprise, expects corporations to move to the new formats over the next two years, while billers should complete their migration in 2012.

For U.S. consumers, the way payments are made continued to shift to debit cards from cash, check, and credit instruments. The 2010 Federal Reserve Payments Study showed that debit use increased at the expense of checks, cash and credit, accounting for 42% of retail payment transactions, a shift that other surveys show has continued.

In 2011, debit cards in particular came to the fore as debates over changes to debit-card fees, required under financial reform legislation called the Durbin Amendment, made national and local news. A 2011 debit-card study by payments research firm Mercator and technology company TSYS, targeted to bankers, notes that "awareness of current debit and checking account fees is high, with many trying to actively avoid overdraft-related fees by managing their balances closely." The controversy over the Durban Amendment’s decreasing of the fees banks charge for debt-cards ultimately resulted in Bank of America and other banks removing compensating fee increases.

Consumer and retail payments will increasingly shift to mobile over the next several years, with nonfinancial institutions battling for turf with traditional financial institutions and credit-card issuers. Mergers and joint ventures between those firms picked up last year and will accelerate further in the coming year.

A host of new mobile payments methods have come on line for consumer and retail payments, both in the United States and Europe. Indeed, the rise of mobile payments is the biggest technology trend of 2011, with the greatest implications for 2012 and the future. The purchase of Motorola Mobility by Google and the introduction of mobile payment services by Google, PayPal, and others are some examples. As for Europe, bankers speaking at a SWIFT conference called for cooperation amongst major banks in developing epayments systems in Europe lest they be overrun by nonbank competitors, like Google.

Although the international payments market itself is somewhat complex and fragmented, businesses have increasing choices when making and receiving payments internationally. New choices for electronic payments, including both the payment itself and its related remittance information, will increase in coming years. Please see below for resources to help in your decision-making:

American Express: Improve International Payment Processing

Research Results: Need for Faster, Easier Cross-Border Payments

SWIFT: Will the SEPA End Date really change the game?

International Payments: Overshadowed by SEPA? (registration on gtnews.com required)

As survey after survey has shown, over the past two years debit cards are the fastest growing means of payment. As fewer people carry much cash, restaurants are often faced with multiple debit and credit cards to settle checks.

Sliver Spoon apparently has had enough. Cashless patrons can always handle it the way EPayDb writer-researcher James Richter and his buddies do: play credit-card roulette.

Clearly, however, person-to-person (P2P) epayments are a problem still waiting for an elegant solution that will have wide consumer acceptance.

“For anyone who strives to stay on top of the latest trends, research, and emerging companies in the rapidly growing epayments industry, it can be difficult to sort through all the different resources that give small glimpses of the larger picture,” said Collin Canright, Editorial Director of EPayDB.com. “That’s why we built EPayDB.com, soon to be the go-to source for curated news links, categorized market research, and accurate information on companies and people in the epayments industry.”

EPayDB.com will be tracking the fascinating story of competition and innovation within the payments industry for all invested parties to access. More than a blind aggregator of anything and everything related to payments, the information on EPayDB.com is hand-picked, organized, and sourced for the most rewarding research experience possible. And for every company and person who wants exposure to the rapidly expanding EPayDB community, the site features a directory that can be edited by registered users (registration is free), pending a fact-check from the EPayDB.com editors.

Concurrent with the EPayDB.com launch, the editors are also conducting a brief survey to get a sense of what is grabbing the attention of today’s payments experts, and what we can expect in the future. A description of the survey’s findings will be distributed to all those who choose to participate in the form of a free ebook.

EPayDB.com was born alongside the exciting new developments in the payments industry. The recent generation of epayments companies continues to grow and reshape how we think about monetary transactions. The new payments landscape is integrating mobile technology, social networks, and existing payment infrastructure to streamline the lives of consumers everywhere.

In response, established companies have been working non-stop to stay ahead of the curve. They have been forming international partnerships and setting global standards for better integration while snapping up new technologies through strategic acquisitions. Should these giants of commerce be toppled by the new class of upstarts, they certainly won’t go down without a fight.

About EPayDB.com

EPayDB.com is the epayments database for curated news, categorized market research, and accurate information on companies and people in the epayments marketplace. It is a one-stop resource for payments professionals, investors, media, and more.

Motorola Unit Buy Could Give Google An Upper Hand Versus Isis | 15 Aug 2011 | PaymentsSource

Analysis: After Google Buys Motorola, What’s Next for the Payments Ecosystem? | 15 Aug 2011 | PYMNTS.com

One of the main things commentators are writing about is Google’s ownership of Motorola’s patent portfolio. Here’s a list of the Motorola payment patents Google is acquiring.

Mobile payments have been in the making at Motorola, as well as the rest of the industry, for quite awhile. Maybe now’s the time. . .
Motorola M-Wallet Brochure from 2006