Thanks to the combined forces of a software infrastructure from IP Commerce, the IP Payments Framework, and a consortium of payment processors, data aggregators and small business lenders—including the likes of Chase Bank of JP Morgan Chase & Co., PayPal and CIT Group—small businesses will be able to complete financial transactions from their desktops, as a service.
At the Microsoft Worldwide Partner Conference here, IP Commerce, in conjunction with Microsoft, announced July 12 its PASS (Payments as a Secure Service) capability, which will be available to small businesses through the next version of Windows Vista.
IP Commerce, based in Denver, is focused on delivering payments as a service to any application. Its software currently lives in two places: in browsers (in an online stores shopping cart, for example,) and in hardware at the point of sale.
At the same time, IP Commerces payments platform is hosted by banks and other payment service providers, and by transaction network service providers that handle about 12 billion transactions a year, according to Chip Kahn, founder and CEO of IP Commerce.
"We spent a lot of time creating a meta model to enable a single payment service class—for credit cards, business-to-consumer and business-to-business payment capabilities—made available through an SOA [service-oriented architecture]," Kahn said.
"Where were focused now is in creating a critical mass around this service and providing more capabilities for the end user to access on-demand payment services, and access any payment service theyd like right off Vista," he said.
The way small businesses currently interface with credit card and financial services companies is through one-to-one integrations—either large-scale or through some sort of file transfer facilitated by EDI (electronic data interchange).
The goal of PASS is to allow ISVs, system integrators and VARS to create their own SOA-based financial management applications using the PASS infrastructure.
At the end of the day, the idea is to enable, for example, a supplier to get a purchase order invoice through to Wal-Mart and accept payment without having to do a proprietary integration, Kahn said. Through the PASS Consortium, small businesses will be able to receive payments, process transactions, pay invoices and get other financial services—a goal that requires buy-in from a good portion of the companies that actually facilitate electronic payments, hence the Consortium.
PASS members read like a list of whos who in the financial services industry, including BankServ, which provides payment services—Fedwire, SWIFT and TurboSWIFT, ACH and Check 21—to banks, governments and businesses; Chase Paymentech, one of the countrys largest financial transaction processors for businesses; CIT Group, a commercial and consumer finance company and major Small Business Administration lender; Internet Commerce, which provides B2B e-commerce solutions; PayPal, which has an online payments system; and Pay by Touch Payment Solutions, a biometric authentication and payments software provider.
"Data aggregators have to be part of the Consortium," Kahn said. "We have eight principal members, including the largest EDI VAN [value-added network], the largest bank and the largest e-commerce provider. It really plays through the whole day in the life for a small business, and its an open platform."
Another part of the goal is to provide payments to small businesses where they live—their PCs. But the consortiums work comes with a caveat related to the Windows Vista release.
Expected early in 2007, Vista is probably one of the most delayed releases in Microsofts history. It has been scheduled and rescheduled for public availability, with one issue after another delaying its official launch.
Kahn said he doesnt see this as a problem for PASS. "Weve been working with Vista since January," he said. "Beta 2 has been complete. Certainly for anybody who is looking to build solutions against Vista, if they think they can wait theyre making a mistake. Its pretty close. We dont believe theres going to be much, if any, delay past January."
Business users will need to have an investment in Microsoft to utilize the PASS system; at minimum they need to upgrade to Vista.
"Thats where we see the whole role of SIs and their value-add," Kahn said, adding that Microsoft is tapping the 7,000 partners in attendance at the Worldwide Partner Council to expand the PASS framework.
The PASS services are expected to be fully implemented by the time Vista launches early in 2007.