FECC set to announce Sun Micro, MSFT, Compaq, KPMG
Like I posted yesterday, this is just the beginning for FECC and I expect to see more favorable accomplishments in the near future.
technologypost.com
From the South China Morning Post
E-COMMERCE
Service a boost for SAR Net retailing
CAROLYN ONG
Internet retailing in Hong Kong is receiving a boost from e-commerce firm, First Ecom.com, which claims to be the first company to offer real-time, on-line, credit-card processing for Web shop owners by bypassing the SAR banks.
Most banks have been reluctant to grant credit-card accounts to on-line traders as they perceive an increased risk of stolen card numbers and defaulted transactions on the Net.
"Net entrepreneurs in Hong Kong must have a physical location and registration before the local banks would consider letting them set up merchant accounts," Maren Leizaola, director of e-commerce start-up, United MTA, said.
Only two banks offer on-line merchant accounts, Citibank and Bank of China. But both banks reportedly charge 10-15 per cent commission on any sale - drastically eroding the traders' profit margins.
As a result, many Net entrepreneurs have been forced to go to United States banks to set up merchant accounts.
"They are willing to do this even though they have to pay US taxes," Mr Leizaola said.
But First Ecom.com, in conjunction with its banking partner, Bank of Bermuda, promises to offer secure credit-card verification at rates of between 3.5 per cent and 6 per cent of sales value, depending on transaction size and volume.
According to WF Yuk, director of electronic services at Hongkong Post, most banks charge two to three times the ordinary premium for on-line transactions.
As the Bank of Bermuda is located in a tax-free zone, retailers would not need to pay US taxes.
Two Internet service providers (ISPs) - Asia Internet and Asia Online - have signed up with the Nasdaq-listed company.
"The banks ask the middlemen like the ISPs to handle the billing for these merchants, to bill on their behalf, effectively taking the risk for the banks," Charles Mok, general manager of SAR ISP, HKNet, said.
"That's not reasonable for the ISPs and ISPs are reluctant to do that."
But First Ecom.com and Bank of Bermuda would shoulder the risk in the event of Net fraud, according to Gregory Pek, First Ecom.com chief executive.
He said First Ecom.com could clear merchants' sales to customers anywhere in the world. The service also could accept more currencies than US banks, which generally accepted only US dollars. First Ecom.com accepted Hong Kong and Canadian dollars, deutschemarks, euros, pounds and yen.
To screen prospective Web retailers, the company would check the financial status of companies and run a check with global security agency, Interpol. It did not have any set criteria for granting merchant accounts, but would prefer "larger clients with better reputation for the time being".
First Ecom.com, which has its headquarters in Hong Kong, uses the processing platform of First Data Corp, a well-known US-based credit-card transaction clearing house. First Ecom.com approves traders and processes transactions through the Bank of Bermuda in Bermuda, to which it is connected by a leased line.
Its payment gateway is powered by servers from Sun Microsystems, using Java Card technology. It also uses technology from Open Market, an e-commerce hardware and software provider based in the US. Both firms promise to refer customers to First Ecom.com. Other companies such as KPMG, Compaq Computer, Microsoft and People Phone are expected to announce similar alliances this month.
One disadvantage is that First Ecom.com does not use secure electronic transaction (SET) technology, though it can process SET and secure socket layer encrypted credit cards. Both Citibank and BOC use SET.
Mr Pek said the company initially would offer credit-card clearance only, but was working on supporting other payment methods such as debit cards, charge cards and Mondex. To build those systems, First Ecom.com had invested US$2 million and would invest another $20 million this year.
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