he Internet has created a global marketplace for businesses and consumers-and accompanying it, a lot of expectations. People making purchases online with a credit card expect secure and speedy transactions, and they want to compare prices and complete transactions in their local currency-in real time. And if they can have all this today from e-commerce merchants, why not expect the same from brick and mortar merchants?

Privately-held Planet Payment, a trade name and trademark of Planet Group, Inc. and its subsidiaries, offers payment-processing solutions that enable both virtual and physical merchants and cardholders to complete credit card transactions in each party's preferred currency.

The company provides these solutions to acquirers, processors, gateways and directly to merchants.

When Planet Payment was founded in 1999, the company provided e-commerce merchants with credit card processing and currency conversion capabilities for their Web sites. One of its first major customers was acquirer The Bank of Bermuda. In October 1999, Planet Payment signed its first merchant selling in U.S. dollars-an e-tailer in New Zealand, Jennifer Ann Lingerie.

"We were ahead of the market in 1999 and 2000," said Philip D. Beck, Chief Executive Officer for Planet Payment. "There wasn't a lot of [transaction] volume in the virtual world at the time, so we decided that we were going to take our experience and apply it to the physical world, too."

Planet Payment now offers multi-processing and time-of-sale currency conversion capabilities to brick and mortar merchant locations such as hotels, restaurants, airport vendors and retailers.

Planet Payment's time-of-sale currency conversion services, also called Dynamic Currency Conversion (DCC), convert the purchase amount from the merchant's local currency to an amount in a cardholder's local currency in real time and at the point of sale- there's no waiting for monthly credit card statements.

When cardholders use their credit cards to make purchases in a currency different than their own, the credit card associations and providers have usually handled the currency conversion. They also added fees (an exchange rate plus 1-4%) to the purchase amount for this service, but typically did not disclose them to cardholders in any meaningful way.

With Planet Payment's service, cardholders can see the purchase amount in their home currency right at the point of sale, together with the original transaction amount quoted in the merchant's currency. While still at the POS, cardholders can decide whether they want to pay the amount converted into their home currency at the exchange rate provided by Planet Payment, or to pay in the merchant's currency and wait to see the currency conversion on their monthly credit card statement.

In addition to multi-currency processing, Planet Payment offers two services within its suite of currency conversion solutions: FX Transact enables the display of currency conversion information on the transaction receipt generated at the point of sale. It provides merchants with a completely integrated localization solution that is supported through merchants' existing point-of-sale technology.

FX Assured converts each transaction at a currency conversion rate that is guaranteed to be less than the rate at which the credit card provider would have converted that same transaction.

Over the past five years, the company has built partnerships with acquirers, credit card processors, payment gateway providers and ISOs to bring its offering to merchants.

Planet Payment signed an agreement with First Horizon Merchant Services Inc. (FHMS) to develop and implement DCC services for hospitality merchants such as hotels and resorts, and launched this initiative in 2002.

Last year, ISO Humboldt Merchant Services, LP partnered with Planet Payment to bring dynamic currency conversion to its e-commerce and MO/TO merchant customers, and Fifth Third Bank signed with the company to bring these services to its national retail customers.

Planet Payment also has alliances with Vital Processing Solutions, Synergy Corporate Technologies, Ltd., Shift4 Corp., Servebase Computers Ltd., MICROS Systems Inc., Plug & Pay Technologies, Inc., Integrated Systems Development, Inc., and Hotel Information Systems.

In March 2004, the company announced an important initiative with Internet gateway Plug & Pay Technologies, Inc. and VeriFone, Inc. that brings DCC to a POS terminal. Plug & Pay is using VeriFone's SSL and IP/Ethernet-enabled Omni 3750 to offer Planet Payment's DCC solution at the retail merchant's point of sale.

When customers' cards are swiped through the terminal, the Plug'n Pay software identifies foreign-issued credit cards. Using Planet Payment's DCC solution, cardholders are presented with a choice on VeriFone's Omni 3750 to complete the transaction in either the merchant's currency or the cardholder's local currency.

If cardholders opt to pay in their home currency, the receipt displays the amount of the transaction in both currencies and the exchange rate, and cardholders' credit cards are billed in that amount.

David Price, President of Plug & Pay, said merchants were asking his company for enhanced services such as dynamic currency conversion at brick and mortar stores.

Using the Internet, transactions are sent first to Plug & Pay's gateway service and then on to the merchant's payment processor.

This solution is targeted to brick and mortar merchants with an online presence. It enables them to consolidate their payment processing for all aspects of their business using the Internet and one service provider.

Beck thinks this is a significant step in what's to come at more and more retail merchants. He said physical world retailers have their Web sites targeted to particular geographic regions, with prices quoted in the customers' local currencies. "If you [want to] localize price, you can localize it in a store, or in a hotel or restaurant as well as online," he said. "The whole retail experience is going to change- I'm talking about mainstream retail."

Planet Payment's headquarters are in Long Beach, N.Y., but the company also has sales offices in Atlanta, Fort Lauderdale, Fla., London and Singapore. It has a small direct sales force, but Beck said, "We principally work with sales channels. Our job is to work with acquiring and processing partners and help their sales people sell the product into their existing relationships.

"We're also doing 'merchant awareness.' We explain the product as best as we can to merchants so they are knowledgeable about it, and they can talk with their acquirer, processor or with their technology company," he said.

Beck said Planet Payment's customer service department is on-call to respond to any inquiry on a 24/7/365 basis.

Planet Payment's services provide an opportunity for ISOs/MLSs to offer a new solution to their new and existing merchant customers and to earn additional revenue on transactions processed by merchants within their portfolio.

In Planet Payment's currency conversion process, a small margin is earned on the conversion, which Planet Payment shares with ISOs/MLSs selling DCC services, the merchant using the services and Planet Payment's processing partners.

The company uses buy-rates and provides residual income to ISOs/MLSs. It also offers ISOs a referral/sales agent program that allows them to offer DCC to their merchants as their own product.

"The acquirers and ISOs can sell it as theirs-and it is 'Powered by Planet Payment,'" Beck said.

Planet Payment is compliant with Visa's Cardholder Information Security Program (CISP) and is a registered third-party processor with Visa; the company is also a Merchant Service Provider for MasterCard.

Visa and MasterCard were sued for their currency conversion practices, and in April of 2003, a California court ordered the associations to refund millions of dollars in exchange fees to cardholders for not properly disclosing the fees on their statements.

"The product that we're offering is the answer to the lawsuits," Beck said. "The courts and the regulators are looking for competition and more transparency to the cardholder and more informed decisions at the point-of-sale.

"But we don't think in terms of the lawsuits. We truly believe there is a better way to use the existing system.

For international travelers that are using their cards overseas, it is much more helpful to see pricing localized in your home currency as well as the local currency.

Beck said the difference is disclosure and choice for the cardholder, and that the whole retail experience is going to change.

"If a retailer wants to attract a foreign customer, then they need to appear local," Beck said.