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HomeATM ePayment Solutions is changing its business model. Instead of relying on merchants to distribute its personal card-swipe and PIN-pad device to their customers, the company plans to license it to large processors and merchant acquirers and to players in the funds-transfer market, CardLine sister publication ATM&Debit News has learned. "We're going to license our hardware to Tier I processors to try and get our product in the market instead of HomeATM being the lead sales generator for the device," says Kenneth Mages, HomeATM chairman and CEO. He describes the company's effort to mass-distribute its Safe-T-PIN device on its own as an "uphill battle that, quite frankly, we can't win." Montreal-based HomeATM no longer will be involved in direct payment processing and instead will use Brookfield, Wis.-based transaction processor eFunds Inc., which is owned by Jacksonville, Fla.-based Fidelity National Information Services Inc. HomeATM has had trouble convincing electronic funds transfer networks that a Safe-T-PIN transaction is no different from a face-to-face PIN-debit purchase at a brick-and-mortar store, according to Mages. The networks worry about the handling of disputed transactions, he says. During the 18 months it processed transactions, HomeATM "discovered during that time we had zero transactions disputed," Mages says. "We had no breaches, and we had no fraud," he says. HomeATM processed more than 70,000 transactions worth about $8 million between January 2008 and the middle of last month. Generation Technologies Inc. found success selling HomeATM's product to Internet retailers under the MiniTeller brand, says Hish Derby, director of technologies with the Burlington, Mass.-based independent sales organization. The merchants interested in the device typically have recurring monthly business from customers, such as online pharmaceutical companies, says Derby. Licensing the hardware to such processors as First Data Corp. and Total System Services Inc. is something that seems to please the networks, Mages says. "If they sell it [to merchants], the networks don't have any questions," he says. HomeATM has set the suggested retail price for the terminal at $49.95. "If you use a netbook along with HomeATM, you now have a [POS system] that rivals anything under $5,000," Mages contends. A netbook is a laptop computer designed primarily for Internet use. Adding computer software such as Quicken POS to a netbook can help small merchants with retail sales management without the expense of larger POS systems, Mages says.
