Citibank plans regional payment gateway

The online payment gateway provided by Etisalat business unit, Comtrust, appears to be proving popular but it is about to face some serious competition from Citibank's latest offering.

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By  Matthew Southwell Published  September 26, 2001

|~||~||~|The online payment gateway provided by Etisalat business unit, Comtrust, appears to be proving popular. In recent times the company has signed deals with both ELC New Media and National Bank of Abu Dhabi (NBAD).

ELC New Media has selected the Comtrust payment gateway for its ELCdesigns.com — a service that allows customers to buy from an eclectic collection of readymade PhotoShop and Flash web designs. NBAD has used it to enhance its online offering.
By using the gateway infrastructure, the bank is now capable of processing online credit card and merchant transactions for it customers.

"The service, which is the first of many steps that NBAD is taking in order to firmly establish its presence in the e-commerce space, allows merchants to accept credit card transactions online, delivering significant advantages to compete in the online world," says Khamis Mohammed Buharoon, head of domestic banking at NBAD.

However, Comtrust is about to come up against some serious competition. Having piloted it with four or five customers in the region, Citibank is set to unveil its CitiConnect solution. Touted as a web-enabled financial service for B2B marketplaces, the solution will see its first action in the recently announced Aregon supply chain solution and portal.
Sankar Krishnan, vice president and region head, Middle East, South Asia & Africa, Citibank, believes that the bank's solution will be more than a match for the solutions currently on offer in the region.

"If you look around the Middle East there are no payment gateways. The only ones we have are the ones provided by Visa and MasterCard, which are only for the credit card," he says.

As for Comtrust — which uses the secure electronic transaction (SET) protocol, developed by Visa and MasterCard — Krishnan is unfazed. "What Comtrust are really doing is only using the credit card as the method of payment where we have credit cards, fund transfers, virtual payment cards and an 'e-card' which takes care of the transaction," he explains. It also offers domestic and cross-border payments, foreign exchange and escrow.

The ability to complete a transaction in a number of formats is an important one according to the Citibank vice president. "One of the reasons why Internet transactions in the region are not picking up is because there are no smart ways to pay. These [Credit card only solutions] are meant for economies where the central banks are fully automated so we [the Middle East] are limited," he comments.

If Krishnan is to be believed, then not only will the CitiConnect solution give users more options when it comes to online payment, but it will also encourage the practice. "We have come up with certain solutions which make it possible," he boasts.
The confidence to initiate online payment through the Citibank solution will supposedly come from user confidence in the bank itself. Krishnan is keen to push the company's credibility, and refers to the experience Citigroup has gained from operating 104 countries.

He adds that because the solution is built in-house — in the sense that Citigroup has technology companies such as CitiCorp Overseas Software and CitiCorp Technologies under the same umbrella — successes elsewhere can be easily replicated in the region.
"They [the technology arms] know the Citibank systems in all 104 countries. I can go to that guy and get them to replicate systems here that we have elsewhere," says Krishnan.

CitiConnect employs Secure Socket Layer technology (SSL) with Public Key Infrastructure (PKI) and digital signatures to ensure message security. Standard XML formats enable real-time messaging between e-commerce marketplaces and Citibank, while also providing seamless integration into ERP systems at the middleware layer.

Potential users of the solution have two options. They can either plump for an embedded solution, where it is made part of the software that powers the marketplace in question, or a hosted settlement option, where the solution integrates into an exchange via a URL link to a Citibank hosted portal.

Citibank believes that in addition to benefiting from the extensive depth and breadth of its global reach, customers will be able to extend their own market reach. At the same time, by transacting payments online, users will be able to reduce transaction costs and labour requirements while establishing an automated settlement capability that reduces cycle time and the need for working capital.

Krishnan explains that, no matter how the solution is talked up, Citibank is essentially a "horizontal service," and, at the basic level, the service is a simple one. "When someone is in a electronic marketplace and they click on pay, Citibank takes the transaction through and moves the value from the buyer to the seller.”||**||

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