FleetBoston, for instance, six months ago partnered with start-up Equidity to provide a hosted Web service that online marketplaces can use to process ACH buyer payments. According to FleetBoston senior vice president Timothy Burt, Equidity's payment-processing hosted service has found takers with a few online marketplaces, such as BuildNet. But he says there's little momentum around the service, even though it only costs a few dollars per transaction. The cheaper option ACH payments are far less expensive than credit card processing, which carries percentage-based fees for the sellers. The biggest challenge in e-commerce is not technology.
Security is always of paramount concern in payments processing.
Two European banks, Holland's Rabobank and Sweden's ABN-AMRO, are engaged in consumer and business banking via the Internet. He said 320,000 customers now use the Internet for banking. But if there's no strong security, there'll be no virtual banking. Rabobank gives customers Vasco Digipass 800 tokens and smart card readers for two-factor challenge and response authentication to prove their identity online, Willems says. The Digipass 800 becomes activated when the user plugs in his smart-card based banking card, which is widely used in Europe.