The following interview was conducted on 1 February 2000:

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eMarketer: Please introduce yourself and tell us a little about your company.

Philip D. Beck: My name is Philip Beck. I am the CEO of Planet Payment, a company that specializes in internet payment solutions to merchants everywhere. We consider ourselves to be an enabler of internet companies.

We provide the 2 critical pieces of an e-commerce transaction. One is the gateway: the ability for a purchaser to visit a site, enter his credit card information and for that information to be transmitted to the card associations for authorization and settlement. We also facilitate a internet billing solution, such that small to medium sized companies around the world can receive payment in real time in any currency of their choice.

We support all Visa- and MasterCard-approved currencies, of which there are approximately 146 to 150, and settle in currencies of the merchants' choice. Merchants decide in which currency they want to display and sell. We will settle in that currency or in a different currency and we can transfer it to their account anywhere in the world.

eMarketer: How did Planet Payment come about?

Philip D. Beck: Historically, we are a group from an international law and consulting practice. Our whole business for 15 years was counseling companies engaged in cross-border trade. We were very early adopters of the internet. We had our own internet sites and I think it's fair to say that we had a disproportionate amount of inquiries from merchants and other companies interested in using the internet as a new medium. That started about four and a half years ago.

We saw all this activity going on and we decided that, for a firm that was interested in counseling companies and providing solutions of cross-border trade, the ultimate cross-border trade was e-commerce. We formed a consulting practice and we helped some very significant companies prepare their cross-border and global e-commerce strategies.

In the course of that, we realized that the single biggest impediment to e-commerce was the ability to get paid. We ended up developing a payment solution and partnering with other companies that provide critical fulfillment solutions so a merchant looking to sell their goods and services cross-border could come to us and we could recommend the appropriate solution to them.

We rebuilt the product over a period of about a year and, when we realized just how important it was, we spun it out from the consulting business into a company called Planet Group. Planet Group is a U.S. corporation, headquartered in New York and we have operating subsidiaries in Bermuda, Ireland and the Caribbean currently.

eMarketer: Could you give us a detailed walk-through? Say, I'm a client and I'm selling baskets from the Philippines and I want to do business globally.

Philip D. Beck: Okay. If you are selling baskets from the Philippines, presumably you are, you had a company or you are a sole trader in the Philippines and that's not a problem for us. If we accept you as a client of ours, then the first thing that we do is to ask you to complete our multi-part application process. We will take information from you about your company and how you do business and ask for certain information about your business model. If you have a business plan we'd like to see it.

We're specializing in both ends of the market, small- to medium-size companies and startups as well as the global multinationals. Obviously for a global multinational, we require somewhat less information. But unlike the traditional banks, we are able to be somewhat more flexible in our ability to accept new companies or startup companies, provided we feel comfortable that they have the integrity, that the products they are selling are suitable, that they have the financial wherewithal to sustain that business and to honor their obligations to us.

So we would ask you to complete our multi-part application process and to pay an application fee that offsets our expense in terms of doing our credit check and other inquiries that we will make of the company and its principals in the jurisdiction that you are from. When you check out satisfactorily, then we will ask for the balance of the application fee. Then we will help your design firm, PSP, CSP, whatever, to integrate with our gateway, the Planet Payment gateway which is powered by Authorize Net.

As you may know, Authorized Net is the largest authorization gateway in the world. It was recently acquired by Go2Net. They have in excess of 58,000 merchants and what we liked about the gateway is the fact that it integrates with most of the popular shopping carts. Which means that if your site uses one of the hundred plus solutions that are already integrated with the Planet Payment gateway, technologically, it's a very straightforward 15 to 20 minute procedure to integrate the gateway to the website. In our experience, that was one of the most difficult things that merchants have to deal with. When they build a site, it has to be compatible and integrate with a payment solution. So that's the first issue.

Then we provide our internet payment system to you. We will pay you generally every 14 days, to any account and in most currencies of your choosing, anywhere in the world. For that, our standard retail price is 3.95% and 50 cents transaction fee and we have a minimum monthly fee of $25 to cover the cost of maintaining the account, statements and the like.

That's a very simple overview of our basic product. Now it's our experience that merchants are comfortable in accepting dollars and being paid in dollars. But it is our belief for the job to be done properly, merchants need to display currencies that their customers are comfortable with. So if you are selling shoes to Italians, then you need to display your site in Italian and you need to accept lira. Those are the types of service that we bring to the table: the ability to truly sell goods and services cross-border.

eMarketer: How do you work out the conversions?

Philip D. Beck: Now there are many different models. For instance, we can supply an Italian merchant with a lira currency bin, such that they accept lira and settle in lira and there is no currency conversion.

That's a pretty simple solution. Now if we have a U.S. retailer that wants to receive dollars, we can organize it such that the currency bin that we provide is settled in U.S. dollars -- but we actually accept lira. So they are displaying in lira, and we're passing lira to the card associations for approval, authorization and settlement. The conversion in that case would be done by the card association and the issuing banks and it would be reflected on the purchaser's statement in the same way.

Where we think e-commerce is going in the future is the dynamic display of pricing in different currencies, driven from a single rate table. We have developed a rate table which will drive that dynamic currency pricing on a website. A merchant will be guaranteed, that if they use our rate table, they will, 1, not only display the correct pricing, but 2, they will receive the exact amount that they are looking for as the merchant, in the currency of their choice.

eMarketer: Are you planning to support any additional payment methods in the future?

Philip D. Beck: We are looking at lots of additional payment methods. The one that people most commonly think about is a prepaid card or virtual cards. We believe that the credit card will be the most popular method of payment for the foreseeable future. We are particularly interested in mobile commerce and we strongly believe that in many markets, particularly the European market, that the cell phone will probably be as popular, if not more popular, than the desktop computer. So we are exploring relationships with the companies that are involved in that side of the business. We believe that there is no technological reason why the web servers that display information on a cell phone won't be integrated to, our Planet Payment gateway.

eMarketer: What do you see as the current situation of mCommerce?

Philip D. Beck I personally think that it's very exciting, the crossover between cell phones and PCs. To my mind, that's where we are headed. There's no reason why some of the technologies that we've developed, particularly on the payment side, can't be integrated into those technologies. Whether that's the case or whether smart cards, which is something we are also taking a close look at, are the way to go remains to be seen.

eMarketer: Tell us about your partnering programs and affiliates.

Philip D. Beck: Our mission is to build a global network of resellers. To our mind, anybody that's involved in the e-commerce cycle from the telecommunications companies, the ISPs, CSPs, ASPs, the web designers, right away down to or up to, the acquiring institutions in each market. When a merchant looking is looking to go online, they need these services in their local market or in other markets; the people the provide those services or solutions are ideal partners for us because those solutions need to be integrated with a payment solution.

So, in order for us to meet and talk with these partners around the world, we have a very ambitious strategy. We are attending all of the Internet World and many other shows. I think there are 57 shows on our schedule between now and the end of the year.

In addition, we want to work with acquiring institutions in these local jurisdictions. Many banks around the world get many requests from merchants. These banks have not entered the merchant services business in the past; for them, it's something of a daunting task. So we are looking to partner with these banks around the world, to offer them the ability to out-source their payment processing needs.

We are also prepared to provide due diligence and sales and marketing models to these banks, so that we can actually offer them either a one-stop shop to support and monitor and implement a sophisticated solution for them, either for merchants that are coming to them directly, or for merchants that we can refer to them.

We think that those key bundles of solutions, offered to these banks locally in different regions around the world, is a particularly exciting initiative. If we are not already, our goal is to become the number one payment processing company in the world.

eMarketer: Tell me a little about what kind of geographical distribution of clients.

Philip D. Beck: As of December, we've had inquiries from 121 countries. Our top 6 countries would be Canada, followed by the United Kingdom, the U.S., Australia, India and Hong Kong, followed by New Zealand. So, all countries that you obviously expect. We are also starting to see an increased number of applications from Hong Kong, China and Japan -- those are markets that are going to be very active in the next few years and markets that we are paying particular attention to.

eMarketer: All the Asian players.

Philip D. Beck: Right. We exhibited at Hong Kong Internet World, Japan Internet World, we'll be out in Singapore first few days of March. The amount of interest and pent-up demand from local companies is just incredible, and we've been mobbed at some of these exhibitions. We've initiated discussions with the local banks in terms of integrating to their systems and providing additional solutions and expertise and working with them to service the needs of those four merchants.

Japan Link is an interesting example. The goal is for merchants to localize their websites in different markets; the technology companies need to do the same thing. If you have an English-language shopping cart or catalog, you need to have a localized version of that in local currency and local language in the markets that you are selling to, to match the look and feel and substance of the website. Japan Link are a good partner for us in the Japanese market; they can use their localized shopping carts, together with our payment systems, to support the needs of Japanese merchants.

We also have a relationship with a company called DX Storm and relationships with several other technology companies, shopping cart and shopping catalog solutions providers. Most of the world leading solutions are already integrated with our platform.

There's also our relationship with Cable and Wireless, a British company that's been around for a long time. They are a reseller of ours in various markets around the world. Together with them, we are building an e-commerce switch which will allow us to switch transactions from our gateway, and from Cable and Wireless' platform and other platforms, into different processes around the world. That's a project that we are quite excited about -- sort of the back end technology.

eMarketer: How about in the up-and-coming Latin American market?

Philip D. Beck: Well, Bank of Bermuda, which is one of our key partners, is in the Latin American Caribbean region. They have a lot of expertise for Latin America generally. In fact, I'm looking at a report for December and I see that that 3.9% of all applications came from Argentina. Going down the list I can see Mexico, 2.1%, Brazil 2%, Venezuela 1.7% -- and that's just the top 21 countries.

eMarketer: What are your future plans, especially as mCommerce develops and the different sectors of the global market keep growing?

Philip D. Beck: We will be building our e-commerce portal or e-commerce architect, which is designed to aggregate all of the solutions that a merchant needs in order to conduct e-commerce properly. In our world, that means the ability to display your site with dynamic currency. It means the ability to display multiple language and it means the ability to do fulfillment properly. It means being able to physically ship goods from one place to another, to have the right types of both the filling solutions and warehousing solutions.

We see the ability to integrate from the shipping companies directly into our payment solution, so the payment is triggered when the shipment is made, to be an integral part of the process and all those types of solutions and more. The ability to get information about what's happening in the world: from a legal perspective, from a consulting perspective, from a statistical perspective -- knowing what are the hot markets to be in and where should the marketing dollars or the technology dollars be spent. All of that information can be found through our e-commerce architect portal. That's one leg that we are developing.

eMarketer: What are your thoughts about the future of eCommerce?

Philip D. Beck: We do think that the potential of the internet and e-commerce hasn't even been realized, let alone executed. For all the hype, we think it's very much under-hyped and that eventually, it will become the preferred medium -- not just for marketing, but also in terms of distribution.

So we think the potential is just enormous. We think that an area that's been very much overlooked over the years, that is the payment processing piece, has suddenly become critical. I think the merchants have realized that and they are frustrated by the fact that without the ability of your local bank, or a payment solutions company like Planet Payment, there's no way you can sell your goods and services online. You are completely stopped from getting this business.

I think these small merchants know that and I think that it's incumbent upon the world's financial institutions to move to support those merchants. We want to partner with those banks to help them move as quickly as they can to do that. We feel that dealing with the merchants, acquirers and their partners in 121 plus countries is the ideal way to go. E-commerce knows no borders and neither do we.

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