Direct payment on the Internet, coming soon!
Jean-François Parent - Newspaper Le Droit d'Ottawa - June 15th, 2002
You find a CD or a book on the Internet. To pay for your purchase, you select your financial institution, and you are directed to their web site. Once in your account, accessible with a password, the merchant's bill is there, waiting to be paid. You authorize the debit and your financial institution confirms to the merchant that the sale is completed. All this in less than a minute.
"Banks are the most secure for on-line transactions. If they permit direct payment on the Internet, as they do in stores with Interac, e-commerce can finally really take off", adds Mr. Rioux.
Problems with on-line transaction security? Direct payment on the Internet, which allows you to immediately settle your
on-line purchases without disclosing any personal information to the merchant, may soon be available to solve these problems.
This is the prediction made by Othentik Technologies, a company based in St-Laurent, who proposes direct payment on the Internet with HyperPayment. "You can authorize a debit from your bank account directly to the merchant, with your bank's web site as an intermediary", explains Patrick Rioux, CEO of Othentik.
The HyperPayment solution is simple. You find a CD or a book on the Internet. To pay for your purchase, you select your financial institution, and you are directed to their web site. Once in your account, accessible with a password, the merchant's bill is there, waiting to be paid. You authorize the debit and your financial institution confirms to the merchant that the sale is completed. All this in less than a minute.
"Banks are the most secure for on-line transactions. If they permit direct payment on the Internet, as they do in stores with Interac, e-commerce can finally really take off", adds Mr. Rioux.
Security of personal information is the principal obstacle in on-line purchasing, according to Statistics Canada's inquiry on the use of the Internet at home. Only one out of five Canadian consumers trust transactional web sites that require a credit card, and therefore the transmission of confidential information, to make a purchase.
Signature
Othentik introduces the notion of a signature on the Internet. "By going to their own account, people identify themselves with a password. It is like a signature", clarifies Jacques Dextras, CEO of Fokus Group, an e-commerce consulting firm. While evaluating the project, Mr. Dextras liked it so much that he is now part of the administrative council, same as Martin Bouchard, president and founder of Copernic.
HyperPayment assures maximal security. Since clients make payments from their accounts, on the secure web site of their bank, no personal information is transmitted to anyone. The bank receives a request from the merchant for the payment of the due sum, and waits for the authorization from the properly identified client. The authorization is then transmitted to the merchant.
For the merchant, the security is even greater. "With the use of credit cards without a signature on the Internet, fraud is always a risk. In this case, the merchant has to reimburse the whole sum, a major nuisance for him", explains Gaston Lafleur, president of the Retail Council of Quebec. With a debit card, the sale is final, relieving the merchant of all payment responsibility.
The solution's potential responds to many of the constraints faced by retailers on the Internet. "A simple and efficient solution for direct on-line payment is what many merchants are waiting for to enhance their transactional web sites", affirms Peter Woolford, from the Retail Council of Canada.
On average, people who buy on the Internet spend about 125$ per order, according to Statistics Canada. Inexpensive products and services are amongst the most popular. Direct payment on the Internet can therefore significantly benefit the retailers.
The cosmetics chain Dans un Jardin has taken a plunge into on-line sales a year ago, and is very enthusiastic about Othentik's HyperPayment. "With this, we hope to secure our base of loyal customers, 20% of which tell us that they don't want to buy on-line because of the security," adds Gilles Sansregrets, president. Following the example of Renaud-Bray and a dozen of other retailers, Dans un Jardin is counting on this solution, which is only in its pilot stages.
Discussions
"We are in the process of discussing the HyperPayment solution with certain financial institutions, but we have to adhere to their development schedule", continues Patrick Rioux. Two years have passed since the solution was first launched, and it has been improving ever since. "We are now offering credit card cash advances and person-to-person fund transfer."
Alternatives to credit cards are being explored by certain financial institutions. Desjardins is presently working on bills with variable numbers. Bell, Hydro-Quebec, and many other accounts have fixed numbers, which makes it possible to pay them on-line. However, other merchants are issuing bills with variable numbers, which makes it difficult to pay these bills over the Internet. "With variable numbers, more merchants could be paid electronically, and this is the first step towards direct payment on the Internet", comments Eric Lemieux, vice president of Electronic Payment and Access Services at Desjardins.
Soon, it will be sufficient to provide your card number and PIN to your bank, and not to the merchant, to pay for your purchases on the Internet using direct payment.
