Bitpass’s New Platform Supports Downloads, Gives Sellers More Data

Bitpass Inc. is expected to announce next week a new processing platform that will, among other things, allow consumers to set up electronic wallets they can use to both pay for and store digital content like songs, videos, and games. The new platform, called the iMedia Commerce Engine, will support transactions on handsets as well as on the Web, and will allow content sellers to gain more control over subscription sales and gather more information about their customers' purchases, the Menlo Park, Calif.-based company says. Bitpass's move is the latest by processors of so-called micropayments?sales of $5 or less?to expand beyond ordinary transaction processing. In recent months, Bitpass competitor Peppercoin Inc., Waltham, Mass., has moved beyond Internet-based transactions to process physical-world micropayments such as parking fees and jukebox music. It, too, has integrated a marketing function into its software to allow merchants of small-ticket goods to justify loyalty programs. At the same time, Bitpass's new platform is similar to one rolled out by Valista Ltd., an Irish-American transaction-processing company that targets wireless carriers and content aggregators, in its ability to support content bundling and promotional offers. “We're excited about the next phase of business,” says Douglas S. Knopper, chief executive at Bitpass, who adds the company's new platform is a response to content providers' concerns about maximizing revenue, protecting their content, and chopping technology costs. It's also part of a move by the company, which started three years ago as a processor for very small sellers of Web-based content, such as comics, photos, and streaming radio, toward larger enterprises. Currently, Bitpass clients include TV network ABC Inc., CanWest Global Communications Corp., Walt Disney Co.'s Disney Online, and The E. W. Scripps Co.'s United Media, a comics syndicator. Since it started, Bitpass has allowed consumers to use an account that stores credit card, PayPal, and bank-account data to make card-based and automated clearing house payments to any merchant that signs up with the company. Bitpass currently counts 4,000 merchants, up from 1,100 two years ago, and more than 500,000 users. With the new iMedia account, consumers can also store downloads, as well, along with any access privileges attached by the seller. The downloads reside on consumers' machines. Users can also access transaction histories, including data on refunds and disputes, through their accounts. The new platform consists of a hosted, software-as-a-service application. Knopper will not cite specific pricing for merchants except to say it ranges from 15% at the high end, per transaction, down to single digits, depending on how many features the seller uses. The more features, such as content protection, that merchants use beyond basic transaction processing, the lower the percentage Bitpass takes, Knopper says. In some cases, he says, merchants prefer to process payments themselves and use only other features. Unlike rival Peppercoin, however, Bitpass has no intention of moving into small-ticket processing for physical-world merchants. Says Knopper, who joined Bitpass last November from DoubleClick Inc.: “We're absolutely staying digitally focused.”