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No Stretch: Yaga Could Revolutionize Digital Payments

T he payments industry may be maturing in respect to traditional commerce, but the newest area gaining traction is the digital goods marketplace. Jupiter Media Metrix claims that online content revenues will reach $5.8 billion by 2006, up from $1.4 billion this year.

This emerging market has several needs distinct from traditional, physical-goods transacting. These unique needs include content management, content delivery and, most important, sophisticated payments and accounting applications.

Most digital content will sell for small amounts that require new payment and accounting solutions - including aggregated billing, stored value and detailed royalty and affiliate accounting.

I met an interesting new ETA member last month in Orlando that is focused on this very market - Yaga, Inc.

Yaga is far from a "startup." With more than $50 million spent in cumulative research and development and five years in development/deployment, Yaga's billing and payments technology already has managed 11 million subscriber accounts and 50 million transactions.

Yaga offers online merchants a sophisticated yet easy to implement end-to-end solution for managing, publishing, merchandising, selling and fulfilling digital content.

What are some examples of digital content? Video, MP3 music tracks, computer software, computer games, electronic books and electronic images such as clip art. Yaga provides the tools to manage this content, from cataloguing and presentation to pricing and fulfillment.

Yaga's simplest offering is one that selectively restricts access to certain parts of a Web site - text pages, images, video - via a basic subscription service. Yaga bills this service by the number of accounts a merchant acquires.

Yaga also offers a solution for micropayments of digital content through an aggregated billing model in which it bundles a series of small payments ($.50, for instance) and then authorizes and settles once the customer account hits a cumulative total above a pre-determined threshold ($5, for instance).

Alternatively, merchants can choose a stored-value billing model where they bill customers in advance ($5) and meter smaller payments ($.50) over a period of time. Yaga also can support affiliate tracking and advanced incentive programs.

Yaga's new President and Chief Operating Officer is industry veteran Steve Elefant, the founder of ICVerify and former Vice Chairman of Cybercash.

"I found Yaga's technology and value proposition to be compelling, and think that the Yaga micropayment solution can be a significant new product and income producer for ISOs and financial institutions," Elefant said.

Elefant added, "Yaga's solution opens up a market in small payments that ISOs have never been able to service. Yaga can aggregate a bunch of little 50-cent transactions to $5 and thereby make the per-transaction charge small and allow merchants to sell lots of lower priced digital goods. This is something really exciting!"

Yaga also offers a host of services to manage a merchant's Web site and its digital content, including cataloging, publishing and digital-rights management to prevent the illegal copying of published or copyrighted content.

Yaga's consumer-facing site at www.yaga.com already serves hundreds of merchants, including UPI (photos), Bijou Films (video), Simon & Schuster (software), and Liquid Audio (music), connecting to thousands of members searching for, downloading and paying for more than 750,000 digital files. Yaga's state-of-the-art technology ensures that content can be delivered to any device that has an Internet Protocol (IP) address - such as a computer with a modem or one of the newer mobile phones. Yaga's billing and payments application can work with any third-party gateway and merchant accounts. You can find out more at www.yaga.com or by phoning 650-227-2100.

Yaga, Inc. John Hingley VP, Sales and Marketing Direct: 650-227-2110 Fax: 650-227-2103 Cell: 415-819-0489 E-mail: john@yaga.com