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Field of ISO Dreams

B uild it and they will come. Sure, but the secret is in knowing what to build. One company has tapped into that secret and erected an e-structure that beckons ISOs to enter. That company is PSiGate.

With solutions deployed on Sun Solaris, Oracle and Sun Enterprise servers in a fully redundant, mission critical, clustered configuration, PSiGate offers secure transaction processing services. Offering reliable means of real-time credit card processing, PSiGate framework additionally incorporates management services such as automated tax and shipping calculations, fraud screening and financial account reporting, guiding merchants through its architecture from the beginning, providing real-time product and technical support.

Promising maximum performance while taking into account power, security, disaster tolerance and bandwidth requirements, PSiGate broke ground in Canada two years ago and laid the first bricks for deploying a secure Internet payment gateway throughout Canada. PSiGate licensed Clear Commerce's hosting engine, built a reliable enterprise and subsequently entered the merchant acquiring business.

With only five financial institutions in Canada (as opposed to thousands in the U.S.) and stringent criteria-higher discount rates, trade references, typically from 5 to 10% anticipated revenue deposited up front, not to mention lack of duality in bankcard accounts-the inability of Canadian merchants to do business was palpable in the marketplace. PSiGate recognized how onerous this bank "all-onopoly" was to new as well as small- and medium-sized merchant businesses, and set out to construct a multi- level playing field.

Because of its secure gateway, fraud detection and protection capabilities, and financial strength, the big five Canadian banks allowed PSiGate to step in, underwriting accounts to "risk" merchants. Partnering with Bank of Nova Scotia for Visa, Bank of Montreal for MasterCard and a direct relationship with AMEX, this Toronto based merchant services provider has assembled empowering solutions, forging an easy and seamless interface to new or existing online commerce enterprise.

Recently, chief architect James Mundle gave the GS a personally guided tour of PSiGate. Take a look at the mainframe, cross beams, flooring and walls that make up its inviting infrastructure:

Merchant Accounts-PSiGate removes the largest obstacle that a merchant faces-qualifying for and acquiring credit card merchant status for the Internet. How? Their structure is heavily reinforced with multiple alliances with banks that handle VISA, MasterCard and Amex, providing a single source for merchant accounts.

Web APIs-Merchant Web sites are seamlessly integrated by creating an application or modifying an existing application to incorporate the appropriate PSiGate API. This is accomplished by populating data structures with transactional data such as customer names, credit card numbers and shopping cart data needed to perform related functions.

Fraud Protection-In addition to the fraud checks provided by the card processor, the PSiGate Fraud Protection module provides extensive automatic checks that substantially reduce risk. These include address verification services, valid card number checks, duplicate order checks, spending pattern checks, frequency of card usage, and guards against automatic credit card number generation programs. Some levels of fraud checking are configurable by the merchant, who can block out specific IP addresses and credit card numbers through a simple Web-based interface. In addition, all credit card information is always encrypted so that unauthorized usage is prevented.

eTerminal-Turning desktop computers into credit card terminals, PSiGate eTerminal empowers merchants to manually process credit card transactions for mail, phone order, and walk-in businesses. PSiGate's eTerminal is the online equivalent of a POS terminal and provided free with all other gateway accounts.

Recurring Billing-PSiGate's recurring billing module enables merchants to automatically bill customers on a periodic basis. By using its online interface to schedule a payment, PSiGate will automatically bill the customer, then send a confirmation e-mail to the merchant and its customer. This service is available as an add-on.

Transaction Module-The PSiGate payment module allows the customer to receive virtually instant notification that a transaction has been processed because it communicates with Canadian card processors in real time. This merchant solution is supported by SSL transaction protocol and allows transactions to be processed via the Internet. Multiple transactions can be processed at the same time, thereby saving valuable time.

Storefront Integration-PSiGate works with a full suite of storefront solutions as well as providing an open API to integrate storefronts from other vendors, so merchants have complete flexibility in designing their storefronts. PSiGate is completely software-independent. A bold statement, but supported by virtue of an open API on the front end, PSiGate has written APIs for dozens of storefronts. Microsoft.com Object, Microsoft Pipeline, Java C, AFP, SiteServer, VB, C++, Oracle Ipayment, Sun, Netscape Biller Expert, ClicNet, MIVA, Icommerce, Impressa, IHTML, Inex and 5Click are all PSiGate-integratable. Should PSiGate come across a storefront that it's not integrated into, PSiGate simply deploys its software team to make it work. This open API also supports HTML posting.

Webserver Platforms-PSiGate APIs run on UNIX, Windows NT, and Linux operating systems, providing customers with a choice of platforms.

Shipping and Tax Calculators-For U.S. UNIX-based merchants, PSiGate provides shipping and tax calculators. The Shipping Calculator module allows a merchant to set precise rules for how customers will be charged to ship the products ordered. The rules can be tailored to the requirements of multiple departments within the merchant's organization. The rules can range from a flat rate per order, to different shipping rates by destination or by carrier. The Tax Calculator module provides real-time calculation of sales tax, including federal, state and municipal sales taxes. Third-party shipping and tax modules are available for Microsoft Site Server customers.

Electronic Softgoods Delivery (ESD)-PSiGate's ESD module allows automatic electronic delivery of soft goods immediately upon purchase, making purchased soft goods available to customers as downloads from an automatically generated Web page. Built-in mechanisms track the progress of the download to verify its success, then the link is automatically removed so that additional downloads from the same URL are disabled. PSiGate's open- system ESD process requires neither the merchant nor the customer to use proprietary software to download soft goods, but works instead through ordinary Web browsers and standard Internet protocols. No special ESD compile is necessary, simplifying operations and reducing costs. Use of familiar, standard tools removes all sales impediments, maximizing merchant revenue by encouraging casual buying, and reducing support costs.

Reporting-The PSiGate solution provides a myriad of graphical merchant reports that enable merchants to display transaction information, confirm shipment of goods, initiate post-authorizations and credits, add and delete entries in the fraud database, and manage the soft goods fulfillment system for their store fronts. Because of the integrated components of Merchant Engine, these reports automatically reconcile orders placed through the store front and those settled through the processor. PSiGate handles the processing of payments from purchase to deposit. Its merchant engine obtains the credit authorization, screens for fraud, deposits the funds, and provides clients tracking and reporting of all transactions.

Who had the vision and forged PSiGate's field of dreams? Meet CEO James Mundle. He was the national sales manager for Compac in Canada, formerly known as Digital Equipment, for the enterprise stores division, handling a business in excess of $550 million per year. Recognizing that in the computer hardware business's quickly shrinking margin, the Internet was the opportunity to take advantage of, James moved on to set up and deploy an Internet mall-hosting and managing Internet storefronts for merchants. Sculpting a solid foundation with attributes he considered imperative-being bank agnostic, a robust telco, world class, mission critical, fraud detection- and protection-feature rich, this e-commerce architect ran into problems trying to bolt on credit card functionality for Canadian merchants while trying to meet crucial criteria for success. Nothing existed in Canada-now it does.

James became a student of the industry, figured out how to do it and licensed Clear Commerce. He wrote the code for Canadian banks and configured solutions that heretofore hadn't existed. He structured a payment services interactive gateway and named it, appropriately, "PSiGate."

"PSiGate is truly a labor of love, a vision of what was important. We've managed to execute it, in a relatively short period of time," explains CEO James Mundle. "We stayed true to our original core value model: great architecture from the beginning. We support merchants that are unable or unwilling to get their own merchant accounts. We support every U.S. bank from a pure gateway perspective. We are a single stop."

That labor of love was tested in October of 2000 when PSiGate went public. Mundle felt it was important that PSiGate's stature be beyond reproach. With PSiGate handling lots and lots of money, Mundle recognized the importance of a position with a high level of confidence and due diligence. The IPO was a testament to what PSiGate has achieved. And don't forget the access to the capital market!

The obvious next step for PSiGate: to enter the U.S. market. Many Canadian merchants look to the United States to get merchant accounts, but ISOs in America didn't have a field to send them to for Canadian merchant accounts. Now they do: PSiGate offers a reseller program for Canadian merchants in the U.S.

With plans to open a U.S. office this year, likely in New York, PSiGate is looking to partner with ISOs to resell its gateway services. Certified with First Data on their national platform and certified with VITAL, PSiGate is interested in meeting with ISOs looking to make money through premier gateway products. PSiGate solutions mitigate and reduce charge-backs. PSiGate also offers a revenue-share program.

"Our product itself is an up sell," praises CEO Mundle. "PSiGate solutions are highly available. We've experienced zero unscheduled down time since we went live in October of '99. We are unparalleled in the ISO industry due to our very robust and merchant-configurable services-services that up sell over lower-end solutions."

What is the cost of a ticket to this field of gateway services? The U.S. list price: $195 setup fee, $24.95 monthly fee, $.30 per transaction. If it sounds a little pricey.consider what's out there now. In Canada, when PSI provides merchant accounts with prices, all bundles together for merchant and gateway services cost CAN $595. If merchants want single currency settlement with either American Express, Visa or MasterCard settled in Canadian, the fee is CAN $49 per month with CAN $.35 per transaction. If merchants want dual currency settlement, it will cost CAN $59 per month.

CEO Mundle supports his position, "We are picked to be not only robust and reliable but best in breed in everything we do. If we are that, we are a little more expensive, but we offer a higher level of service and functionality."

One of PSiGate's biggest challenges has been gaining credibility in the Canadian marketplace when lots of Internet merchants look south. Mundle talks on this issue, "Merchants are amazed to find a Canadian company that does it as well as a U.S. company. We do it by surrounding ourselves with best of breed partners."

Consider PSiGate's best in breed partners: ClearCommerce (application vendor), Sun Microsystems, Oracle, Above.net, Bank of Nova Scotia, Bank of Montreal, legal counsel, renowned Aird & Berlis and auditors, Ernst and Young. PSiGate does present a solid team on its field. For example, at the end of February, Oracle held a large event in Toronto and profiled a company successful in Oracle technology: PSiGate was that company. Based on the positive response, both Oracle and Sun have asked to do presentations across Canada. James will be presenting PSiGate in Halifax, Montreal, Ottawa and Vancouver in May of this year.

With 14 employees at present, an expansion is imminent for PSiGate. According to CEO Mundle, PSiGate will likely double this year. "Since the beginning of this year, we've experienced double digit growth month after month in new merchants, credit card volume process, and transaction process."

PSiGate has built it. Will you come? Visit their Web site at www.psigate.com to experience this well-crafted ISO solution.