Concord EFS says the Internet-based transaction system it recently developed can move transaction information more efficiently from e-commerce Web sites and point of sale terminals to banks.
The Memphis-based Concords EFSnet uses a relatively new formatting standard called XML, and executives at its Web Payment Services Group say that business on the system has been increasing by 30% to 40% per month since it quietly went live in July. Almost all of that business has come from Internet companies seeking faster and smoother transactions, the executives say.
Don Schroeder, the groups director of product development, said the new system allows different systems on different platforms to be able to communicate in a standard way.
XML, or extensible markup language, is the language approved by the World Wide Web Consortium, the international organization that manages the languages of the Internet. It is meant to be more flexible than earlier Web languages, and it can function as a translator for its predecessors.
Roy Bricker, a vice president for strategic alliance in Concords Web services group, said many of the older protocols being used by the industry including one that Concord uses are rigid and hard to maintain. We take the complexity away from the merchant and let them use XML, and we deal directly internally with our own complex protocols.
XML, which was developed by the World Wide Web Consortium in 1998, is free and readily available, and Internet observers say it is relatively easy for computers to understand.
Its like speaking a universal language on the Web, said Ian Jacobs, a spokesperson for the World Wide Web Consortium. Theres no cost to using the format itself.
There is, of course, a cost for EFSnet, but Concord would not say how much it costs to use the system.
Concord says it is the first payment processor to use XML to process transactions, but Mr. Jacobs could not confirm that.
To some extent, XML is a refinement of the consortiums HTML, another standard language of the Internet. HTML, which stands for hypertext markup language, is an interpretive language that simply presents information through a browser.
One of the weaknesses of HTML is it doesnt provide context for that information, said Paul Jamieson, the president of FiSite Research, a Littleton, Mass., Internet research consultancy.
As an example, Mr. Jamieson recalled the time he asked a clipping service to send him all articles contained the word bank, and he received not only articles on financial institutions, but also those about the West Bank.
XML shores up some of the weaknesses of HTML, and it holds the promise to organize all the information on the Internet and put it in context, he said.
Mr. Jamieson said XML encourages individual users to create and define their own tags, which he defined as a command for the language that defines or specifies a particular function or a formatting.
Concord says its merchant clients are discovering one of the advantages of XML over other languages it does not require users to install extra software.
Those who want to use EFSnet need only write the interface from their server to ours, and theyre good to go, Mr. Bricker said. Theres no software distribution, and our specs are compatible with any kind of platform or programming language.
However, Mr. Jamieson said that communicating through Concords XML system may not be so easy as the company makes it sound. Universal compatibility would be true if everyone accepted Concord EFS standards, he said. The major challenge theyll have is getting other financial institutions and interested parties to accept and agree to their XML definitions.
Those definitions could be as simple as the placement and order in a transaction field of the name of the merchant, the type of card used, and the amount paid, he said.
Concord recently configured EFSnet to also work with brick-and-mortar point of sale terminals, but it says no brick-and-mortar companies have signed up to use the system yet. We have extended the advantages of the Internet to support card present transactions, Mr. Bricker said. If you have an Internet connection, you dont have to make a call every time you send a transaction through.
Nacha, the electronic payments organization, has been conducting its own study to see if its automated clearing house network should handle XML-formatted addenda records, the data that accompanies a payment.
Mike Herd, a spokesman for Nacha, said that the study is very close to being finished, and that recommendations will soon be sent to the groups board of directors.
