Multi-Channel PIN Debit: an IP Commerce and Adaptive Payments partnership

I tend to enjoy pontification, both in person and in written form, about platform theory and the business models associated with multi-sided technology implementations.  Ultimately, however, all the pontification in the world is of little value when building a business.  I am, by no means, discounting the importance of a proper understanding of how multi-sided markets work…but, in the words of a wise friend of mine, “ideas matter…but execution on those ideas drives revenue.”

Imagine, then, the joy that I derive when Platform theory and Platform reality collide in a fashion that is mutually beneficial for all parties in partnership.

Such an occurrence was announced today via a press release entitled Adaptive Payments and IP Commerce Announce Partnership Enabling Rapid Integration of Secure Online PIN-Debit Services.

Let’s begin by discussing the actual mechanics of the service announced…

Since first speaking with them, I have been highly impressed with the balance of business and technical aptitude demonstrated by the Adaptive Payments team. This acumen has resulted in the offering of a unique payment service that is high-value for the merchant and, as a result, compelling to the Software Companies who build the software solutions for these merchants.

At its simplest, Adaptive has developed and is offering a PIN Debit solution that works across acceptance channels. The PIN authentication platform they have developed is capable of processing in card-not-present deployments. Importantly, this capability is engineered such that the customer information entered online is captured in a separate channel than the one leveraged for capturing PIN and/or authentication data. In essence, it represents a simple marriage of card-not-present payment instrument entry with a secure IVR.

The physical mechanics of this process are extremely interesting and best described by the Adaptive team themselves on their website in an eCommerce PIN Debit workflow diagramme.

So what is IP Commerce’s role in this relationship?

By exposing their service through the IP Commerce Platform, Adaptive is able to ensure their service sits alongside more “traditional” payment modalities. Ultimately, this ensures that their value-added service is front of mind for the development community during their process of building the transactional lifecycle required by their customers. One set of APIs, that are in the appropriate language for the Software Company (i.e. their chosen development methodology), present not only “traditional” payment services, but value-added services (such as Adaptive), data services, and Federated Identity capabilities.

In addition to this, Adaptive has developed highly intriguing real-time fraud prevention services, known as Save The Sale that enables the presentment of alternative payment methods (PIN Debit) to those customers who are identified as a pre-authorization risk for a credit transaction.

To quote the release:

“We are pleased to partner with a true innovator in the payments market. The alliance enables our broad ecosystem of software company and service provider partners to quickly and easily bundle Adaptive’s services with other core payment and value-added services to create the highly-integrated compliant solutions their customers demand.” – Alfred ‘Chip’ Kahn IV, CEO, IP Commerce

In this quote, there is something worth noting. Through the process of ensuring their services are available through the IP Commerce Platform, Adaptive is able to not only ensure their services are easily consumable by the Software Company community…but their service is of sufficient value that other industry participants desire to bundle the service with the core offerings available from their host. The Platform enables this partnership in business time…rather than in technical time.

Ultimately, the IP Commerce partnership with Adaptive Payments typifies the beauty of a Platform approach. An innovative, high-value (for all participants including retailers, Software Companies, Service Providers, and Sales Channels) service is easily consumable through APIs that, through a combination of product & process, decrease the time and complexity of adding commerce services to software solutions.

Sometimes theory meets reality.
This is one of those times.

Are you interested in learning more about adding the Online PIN Debit service to your application? Peruse the information available on Commerce Lab.

September 30, 2010

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