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A New Tool That Pries Open the Lucrative Internet Market

I SOs have heard all the hype and read all the latest figures about the number of Internet users in the United States, which is up to 122 million and is expected to reach 200 million by 2005. Retail sales using the Internet have grown from about $3 billion in 1997 to $38 billion in 2001. That figure is expected to reach $200 billion by 2005, according to Standard & Poor's.

But herein lies the rub: Almost half of all Internet users are not making purchases online. Why?

Simple answer: The biggest barrier to Internet retail sale expansion is current payment methods. Without a credit card or similar way to pay for purchases, more than 20 percent of adult consumers and almost 80 percent of teen-age consumers are being left by the e-commerce wayside because they don't have a credit card or checking account. Then there's the security issue. With 40 million adults and 79 million teens in the mix, this market has received a lot of attention recently.

Innovative companies have attempted to provide easy-to-use and/or secure Internet payment systems, including the latest variation of prepaid credit or restricted debit card systems, membership mandatory. However, one company has set itself apart from the rest and has developed a different, simple and seemingly effective method to pick up those adults and teens who are eager to expend cash for Internet retail purchases. The company is Stone Mountain, and its solution is the Internet Cash Purchase SystemSM (ICPS).

ICPS is a proprietary, patent-pending payment system that allows Internet users to purchase goods and services online without the need for credit cards, debit cards or bank accounts. The Internet shopper simply purchases items online from any ICPS retailer and pays in cash at an ICPS PayCenterSM.

The ICPS system is a three-step process. The Internet consumer: (1) buys online from an ICPS retail merchant, (2) pays at an ICPS PayCenter and (3) receives the purchase from the ICPS retailer at a location of the consumer's choice. ICPS is very attractive to Internet retailers because it is an additive to their credit-only Internet sales. Also, because purchases are paid in cash before fulfillment, the Internet retailer doesn't have exposure to credit card fraud.

A go-on-anywhere program for POS terminals, smart card readers or the like, ICPS is software driven with no equipment, lines or chips necessary for operation. Emanating from Stone Mountain's data processing center and Web site, ICPS does not require the retailer to make a significant investment in hardware or software. It is easy to understand and doesn't require significant change to the retailer's order-processing system.

For merchants, ICPS is a simple program that lies on top of their Web sites with a turnaround installation time of 48-72 hours. ICPS doesn't invade Web sites and is much easier than getting any type of credit card setup.

Once installed, the merchant receives a daily list of codes representing all purchases made at the Web site, fully integrated into each merchant's existing back-order coding system. The code enables all aspects of the transaction process, from initial identification of the consumer and purchase to identification of the payment for the merchant and transference of funds through ACH.

From the consumer's point-of-view, ICPS promises to be easier to understand and use than most of the present credit or prepaid card systems. It offers not only ease of purchase but eliminates the risks of credit card fraud to consumers and offers them almost complete control of their private information.

The consumer clicks over to his or her favorite site, goes through the regular shopping experience, loads up a shopping cart and heads over to the checkout, where there's a "fork in the road." Consumers can choose either the traditional payment method or click on the ICPS icon.

Once ICPS is selected, the user then is shown a Web page confirming order information and requesting only an e-mail address and a zip code of where the consumer wants to make the payment. No other sensitive information is required. ICPS can even show locations and maps to help the user select the most convenient PayCenter.

Once a location is selected, the user clicks on "commit" and ICPS gives a 10-digit specific code that identifies the transaction to everyone in the process chain, from purchaser to supplier. Easy to read in printable form inclusive of all data (and a bar code for the merchant), the receipt is then brought to the selected PayCenter for payment and process.

From concept to beta test to completion and distribution, Stone Mountain accomplished this in less than a year. Since December 2000, ICPS has been in use at select West Coast merchant Web sites. Now Stone Mountain is ready to introduce it via the ISO network to the Internet retail market at large.

With 500 PayCenters already in place (85 percent of the Internet population is covered by those centers) and approximately 10,000 more set to spring up nationwide by year's end (thanks to a soon-to-be-announced major deal with America's leading convenience store chain), Stone Mountain is turning to ISOs to market ICPS nationwide as well.

ICPS opens up a new "cash only" market to both the Internet retailer and the ISO industry, making it easy to take immediate advantage of a huge and rapidly growing consumer market. The ICPS design is extremely compatible for ISOs in that it's set up like a credit card service.

Not only do ISOs receive a portion of the setup fee charged to merchants, but two additional revenue flow residuals are available. The minimum monthly service fee that ISOs can mark up for resale together with a portion of the percentage charged for each transaction provide ISOs with added income.

Even more attractive is the fact that ICPS is non-competitive with all current ISO product lines. ICPS is an add-on to what ISOs already offer. ICPS doesn't shift business, it increases it.

For new clients, ICPS is a sales advantage for ISOs over competitors. For existing clients, it's a great opportunity to revisit merchants with an offer for them to increase their bottom line. Either way, it's win-win for ISOs and Stone Mountain.

Established in 1994 and headquartered in Long Beach, Calif., the "mountain" is moving next year - Stone Mountain plans on going worldwide. ICPS will leverage the Internet for ISOs with merchants who want to sell internationally. From a skateboard for a schoolboy in Japan to a Stetson hat for a Russian cowboy in St. Petersburg, consumers will become global for retailers hooked up with ICPS.

CEO Larry Moureau shares his company's vision: "Despite the recent dot.com shakeout, this is the next step for e-commerce. The growth area is in Internet merchant accounts, and ICPS is the next step. It's easy to sell. It doesn't require extensive training or heavy technical jargon. It's reliable and trackable. With ICPS, we want to become the next Amex, especially for the ISOs."

ISOs who want to add cash to their cache can visit www.smdci.com.