October 9, 2000 -- PRNewswire/NEWSdesk -- While online merchants struggle to earn profits, two announcements Monday held out the promise that e-retailers at least might be able to collect payments more securely and efficiently through the Internet than is currently possible.
In the first announcement, CyberSource Corporation, a provider of e-commerce transaction services, announced that Wachovia Merchant Services (WMS) will begin offering CyberSource payment and e-commerce transaction services intended to provide merchants with heightened risk management and tighter online security.
The CyberSource Internet Fraud Screen, enhanced by Visa, tracks e-commerce transactions, measures the level of risk associated with each transaction and returns a real-time related risk score to the merchant.
Wachovia Merchant Services is a venture between an operating subsidiary of Wachovia Bank, N.A. -- the principal subsidiary of Wachovia Corp., with dual headquarters in Atlanta, Georgia, and Winston-Salem, North Caroline -- and First Data Corp.
WMS is the first merchant services organization in the Southeast to sign a reseller agreement with CyberSource. Merchants will be able to sign up for the CyberSource eCommerce Transaction Suite directly through their WMS sales representative. The entire CyberSource suite includes payment, fraud screening, gift certificate and promotional services, as well as sales tax calculation, fulfillment management and distribution control.
"CyberSource maintains a strong reputation for service reliability, and we believe that its risk management service is the industry leader," said Kevin Gallagher, director of e-business strategies for Wachovia Merchant Services. "We are pleased to offer this service to help our merchants succeed in their e-commerce endeavors.
"The goal of this reseller relationship is to offer a one-stop shop for Wachovia clients who need e-commerce solutions quickly," said Steve Klebe, vice president of payment industry alliances for CyberSource.
iFormation Group, a joint venture among The Boston Consulting Group, General Atlantic Partners, LLC and The Goldman Sachs Group, partners with market leading corporations to create and develop new online businesses.
eONE Global will have initial committed assets of about $600 million. First Data is contributing certain operating businesses, as well as existing Internet venture interests and management, valued at approximately $360 million, to eONE Global for a 75 percent equity interest. iFormation Group is contributing $135 million in cash and will receive an equity interest of 25 percent in the new company and a warrant for 1.75 million shares in First Data to further align the companies' interests. First Data and iFormation together have committed an additional $100 million in cash, proportionate to their ownership levels, for future business development.
"By quickly creating a pipeline of emerging payment businesses and products, eONE Global will accelerate growth in online and wireless commerce," said Ric Duques, chairman and chief executive officer of First Data Corp. "eONE Global will make the exchange of any kind of payment among consumers, businesses and governments faster, safer and more reliable."
The new company will work to leverage First Data's distribution channels, transaction processing engines and established relationships in the payments arena. First Data today serves more than two million merchant locations, 1,400 card issuers and millions of consumers through its Western Union network. First Data claims processing relationships through its bank alliances with more than 60 percent of the top 100 Net merchants.
iFormation will contribute its expertise in partnering with major corporations to form and develop new online businesses. iFormation will expects to provide eONE Global with business opportunities and partnerships in the emerging payments industries in the Americas, Europe and Asia.
Initial eONE Global operating businesses include:
SurePay LLC: A joint venture with Entrust Technologies, which provides end-to-end payment, trust and security products and services for Internet B2B, B2C and wireless markets. eONE Global has a majority interest in SurePay.
CashTax: A wholly owned subsidiary of eONE Global, CashTax provides secure payment services for businesses to pay state and federal taxes electronically, currently serving two million business taxpayers and processing 36 million annual payments valued at more than $1 trillion.
Garen Staglin, an operating executive who has been managing the development and growth of information technology businesses for more than 25 years, has been named president and CEO of eONE Global. Duques will serve as chairman of the board of the new company. Other eONE Global board members are David K. Pecaut, president of iFormation; iFormation Chairman Clifton S. Robbins, partner of General Atlantic Partners; David Bailis, executive vice president of First Data; and Charles Russell, First Data board member and former president and CEO of Visa International. eONE Global will be headquartered in Northern California.
"A new Payment Systems Technologies category is unfolding, with several 'DNA' components that will determine the future of global payments," said Staglin. "We're moving full speed to establish eONE Global as the premier source where ideas emerge and payment-related products and businesses flourish."
The transaction to create eONE Global is expected to be completed in 30 to 45 days and is subject to what the company's announcement termed "customary closing conditions." As is typical in such cases, the eONE Global announcement included a lengthy list of "forward-looking statements" stipulations that boiled down to: "Well, it might not work out like we hope."
That said, Forrester Research projects that B2B sales over the Net will grow to $2.7 trillion in 2004 and that more than half of this trade will flow through e-marketplaces. They also predict that by 2006, federal, state and local governments will collect more than $602 billion via the Internet.