Give Us Your Credit Details: Ozemail Defies The Trend

Sydney Morning Herald

Tuesday June 26, 2001

Dorothy Kennedy

It's a ``secure facility" intended to encourage you to go shopping online.

Is there any breath left in the once-mandatory e-business pursuit of convincing wary customers to use their credit cards online?

Sure, banks and utilities are as keen as ever to herd customers out of branches and into cyberspace, but these days big retailers seem content to promote their products and services to the online customers they already have.

At a time when flashy B2C (business to consumer) promotions are resolutely out to lunch, it came as something of a surprise when Australia's number two Internet service provider, OzEmail, chose this month to stage a high-profile launch for its OzEpay online payment system.

Pitched at its 450,000 subscribers, the OzEpay concept sounds a lot like a digital wallet, although OzEmail is more inclined to characterise the offering as a ``secure facility" for merchants and consumers to transact online. Customers' credit card details remain with OzEmail where they are already stored for the purposes of Internet service billing and do not travel onto the Web at any stage of a transaction.

Additional data about transactions is not retained by OzEmail. ``OzEpay was created to overcome consumers' concerns about shopping online," said Justin Milne, OzEmail's chief executive officer, in a statement released at the time of the launch. ``OzEpay differs from any other online payment system as we are leveraging an existing financial relationship with our customers."

Generally, digital wallets where a trusted third party handles the credit card details have failed to excite much interest among consumers or online merchants, but OzEmail is banking on the size of its subscriber base to propel its foray into the online payments arena.

``OzEpay will yield excellent results for merchant partners, with increased site traffic, sales conversions and improved communication channels with customers," Milne promises.

Some experts are not so sure. Andrew Sergeant, senior analyst with Jupiter Media Metrix, says the OzEpay service does not seem to be unique and is unlikely to attract the top e-tailers (although big-ticket online store Chaos Music has signed up).

Smaller merchants who need to secure the trust of customers are more likely to see the value in hooking up with a known brand such as OzEmail, he says. The upside is that OzEmail has done the smart thing by selling OzEpay as a security-based service rather than a digital wallet, and has been wise to step beyond its bread-and-butter Internet service business.

Telecommunications companies, for instance, are branching into financial services, and ISPs are likewise on the look-out for new markets as narrow-band Internet sales reach saturation point.

``I think it's an incremental revenue stream," Sergeant concludes.

OzEpay merchants there are currently 12 can look forward to OzEmail taking on the cost of any charge-backs arising from fraudulent transactions. Merchants can also use OzEmail's transaction gateway at no charge, a significant incentive for smaller e-tailers unable to afford the fees charged by banks for the use of their transaction gateways.

David Bathur, OzEmail's communications co-ordinator, says the amount OzEmail charges each OzEpay merchant is negotiated individually and based on a percentage of each transaction generated. ``What we're aiming to do is if you have OzEpay on your site and you don't get any sales that month, you don't pay," he says.

dorothykennedy@optushome.com.au

© 2001 Sydney Morning Herald

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