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Hardware distribution may be a greater hurdle for HomeATM ePayment Solutions to overcome than consumer acceptance as it seeks to expand business for its plug-in card readers that enable shoppers to make PIN-debit purchases online from their home computers, according to Bruce Cundiff, director of payments research and consulting at Pleasanton, Calif.-based Javelin Strategy and Research. "There is viability in the market for both" on-screen PIN-debit Internet-acceptance technology like Acculynk Inc.'s PaySecure product and device-based products like HomeATM's to succeed, he says. "But I see the issue [for hardware-based technology] being more logistics than consumer acceptance," says Cundiff. Atlanta-based Acculynk enables PIN-debit purchases online by integrating its PaySecure software into a merchant's online-checkout system. Cardholders use their computer's mouse to enter their four-digit PINs into an Acculynk virtual PIN pad that appears on the computer's monitor. Montreal-based HomeATM produces a personal card-swipe device and PIN pad that consumers plug directly into a PC's USB port and use for online PIN-debit payments. The HomeATM system requires no installation or software for use with consumers' home computers. When consumers check out at a participating merchant's Web site, the site prompts them to use the device to swipe their card and enter their PIN to complete a transaction. "The distribution of any hardware associated with a method of payment for online transactions hasn't really succeeded in any instance," says Cundiff, citing American Express' distribution failure in 1999 of a chip card reader for consumers who had the first versions of AmEx's Blue Card. "The Blue Card was a marketing success, but the technology part of it was a resounding failure, so I am very skeptical of any solution that requires the distribution of hardware to consumers" he says.
