Some online merchants in Europe purchase payment-processing and fraud-protection services from as many as five vendors to get a reliable system in place. As such, trimming that complicated process down to one service provider potentially could both cut merchant costs and provide greater flexibility and control.
Global payments provider Elavon Inc. will make that pitch to online merchants with what it views as software that addresses key e-commerce concerns, which include expanding payment options and reducing fraud risk and Payment Card Industry data security standards compliance costs.
Elavon, a subsidiary of Minneapolis-based U.S. Bancorp, is partnering with MasterCard Worldwide’s DataCash Group Ltd. company to offer Global E-Commerce Gateway software that provides the services online merchants generally require.
The companies announced the European launch on Feb. 21, and they intend to expand the service to other regions of the world by the end of the year, Paul Clarke, Elavon manager of international products, tells PaymentsSource.
The new software expands connections to various traditional and alternative payment processors and implements the tokenization fraud-prevention techniques from London-based DataCash, Clarke says.
“With e-commerce growing, customers were in need of more services and ended up buying specialized services from gateways to processors, and for fraud protection, from different vendors,” Clarke says. “Now they can get it in one place with Global E-Commerce Gateway.”
The service delivers processing the same way in every country regardless of currency, and it provides all of the necessary and reliable fraud-prevention tools, Clarke adds.
Keeping card data off of the merchant’s Web pages or payment systems represents a key benefit for online merchants; hosted payment pages relocate critical cardholder data to DataCash’s centrally managed data center, Clarke notes.
Tokenization of the data provides more security and lessens the PCI-compliance costs for merchants, Clarke says. In addition, Global E-Commerce provides an online administrative and reporting portal for a consolidated view of all payment activity.
Merchants can set up Global E-Commerce to allow various payment methods, processing endpoints and fraud services needed specific to his business, Clarke adds.
“DataCash has been using tokenization for a long time, and it complements other [products and services] Elavon had been offering,” Clarke says. “DataCash has a lot of experience in fraud protection for online gaming, and if you can manage fraud risk in that space, you can manage it anywhere.”
MasterCard purchased DataCash Group PLC in October 2010 (
Payment data flow from the merchant website to the DataCash data center for tokenization before moving on to the acquiring bank or issuer for authorization, Clarke says.
The merchant has the option to never see the data again, thus lessening PCI compliance testing and costs, or it can request access but must stay within PCI rules, Clarke says. However, the software gains much of its attention from merchants that want to process transactions without their systems ever storing data because PCI compliance can be costly, Clarke adds.
The software allows merchants to accept all major credit cards, though many merchants have expressed an interest in Global E-Commerce because it also connects to alternative payments, Clarke notes.
“The merchants are very interested in being able to accept PayPal payments and the online payments that many banks in Europe provide as instant bank transfers,” Clarke says.
The European software-development market for payments has become “pretty competitive,” but partnerships create distinct advantages, Zil Bareisis, a London-based senior analyst for research firm Celent, tells PaymentsSource.
“A partnership which combines the strengths of a renowned processor, such as Elavon, and a payment gateway such as DataCash should be a welcome addition,” Baresis suggests.
Elavon’s timing for the software offering in Europe couldn’t be much better, Bareisis says.
“The European e-commerce market is growing at double-digit rates, and merchants are looking for increasingly sophisticated partners that can help them manage the complexities of trading online,” Bareisis contends.
Elavon will sell the product through its merchant-services network with Banco Santander SA and other banks and partners and target midsize to large online merchants that do business in more than one country and accept payments in more than one currency, Clarke says. In addition, DataCash sells the product directly to merchants, mostly in the United Kingdom.
Clarke could not disclose product pricing and fees but notes the merchant would pay for each processing or fraud-prevention service chosen. Elavon will receive a flat per-transaction fee that varies, depending on the merchant’s transaction volume and services provided. In addition, Elavon handles all billing and will distribute a share of revenue to DataCash for costs related to the gateway components.
Gareth Lodge, also a London-based industry analyst with Celent, tells PaymentsSource the Elavon and DataCash partnership represents a “keeping up with the Joneses’” as much as being a revolutionary concept.
“The service could be providing the same functionality as, say, what WorldPay U.S. Inc. is now doing,” Lodge suggests.
Elavon is certainly an important player in the payments industry, but “by no means the biggest in Europe,” Lodge adds.
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