I have to agree with Alex’s comment — to me payments as a service is both a technical solution and a simplification/streamlining of the complexities of payments. Ideally, I think it should be as simple for a merchant as asking the “payment service” whether or not I got paid on a particular order/transaction — that simple question is often difficult to answer but it is certainly the way I try and work. Offering just a technical solution doesn’t always help the merchant with the global complexities, and likewise, without a sound technical solution having payment methods anywhere and everywhere is more costly than it could be worth!

http://en.wikipedia.org/wiki/Platform_as_a_service

You’ve just said it all right. I’m in online payments business, so the following list will be only about the online commerce.

These services will be providing a very simple (looking) ‘payment cart’ that will be embeddable into any and every web-site (even on a completely insecure hosting plan, as blog or a social networking profile).

Let’s listen to the end-users as well, they want: all possible types of pre-paid cards (which are many), they want a branded gift/pre-paid card of the merchant distributed through the retail, they want PayPal, Amazon, Google Checkout (because it processes pre-paid VISA cards, other’s don’t), they want international systems as Moneybookers… the list goes on and on.
We also know what they DON’T WANT. They don’t want their ’sporadic’ online life be connected in any way with their ‘orderly’ real life, so – NO derivatives of the ACH and check payments! In Europe it’s a bit different, people are ready to pay from their bank account online…

I built this type of service once (in 2001) and it was aggregating all payment options in the russian market for the merchants and charging several percent on top of the payment provider’s fees. It was and still is a tremendous success there. Right now, when the number of payment options here in the US has grown to a certain level there’s a demand in it here too. I’m going to try this approach again, but modify it considerably because times have changed.

Accepting payments for the customer and doing it all RIGHT – is a challenge. It requires resources, IT base, well built technology that has all necessary capabilities… It costs A LOT. The overall financial risks can be considerable, so, for this scheme of outsourcing the pricing is essential. My estimates and models show that this type of business will be profitable and will be able to grow in a healthy way if the fees for the company outsourcing payments will be between 5 and 10% (depending on the type of a business and the types of risks).

By the way, you are a member of my group on LinkedIn created for the specific type of businesses – online games. These companies in my opinion will embrace this model first, just because they need it BADLY. In a sense they’ve done that already, there are several successful aggregators… pardon!… PaaS businesses in this domain.

Regards,

Alex

Glad you like it — it’s all I was able to come up with to describe the kinds of requests we’re getting.

At Glenbrook, we’re seeing a real trend towards outsourcing the payments back office — subscription management, turnkey fraud management, chargebacks and representments, and of course on the front-end hosted order pages.

So a question for you (or anyone else reading this) — what does the term mean to you? I have a feeling that larger merchants yearn for an opportunity for something that isn’t quite hosted order pages, but something that goes a bit further up in the order pipeline and deeper into the merchant’s other systems.

Thoughts?

Allen