Valista Breaks into U.S. Web Payments with AOL Premium Content Deal

America Online Inc. will begin offering packages of premium content on its Internet service through new software from Valista Ltd., an Ireland-based payment software company, the companies announced today. The new solution allows AOL to target and price particular packages, or bundles, to particular audiences, with special promotional pricing and terms in each case. The system lets consumers make payment on credit, signature debit, and prepaid accounts as well as through direct billing from AOL. The Dulles, Va.-based interactive services giant, which boasts 23 million subscribers, is expected to roll out its first “bundles” next month. “The system is tested and is in place,” says John Hurley, vice president of marketing for Valista. With the new system, marketers at AOL will be able to package its content into targeted promotions without the need to recruit programmers from its technical staff. The complexity of such promotions usually demands specialized work by information-technology professionals, Valista says, which is expensive and time-consuming. “There's no need to do end-to-end IT configuration, which is what has held AOL back in the past,” says Hurley. Bundles served through the program, which Valista calls OffersPlus, can be defined by both time and event, and can handle content coming from multiple vendors of such premium content as music, games, movie clips, and computer software. A games customer, for instance, might be offered 10 game tokens if he buys a monthly subscription, or a music customer might be allowed to buy three MP3s of a popular artist and get the next two at a 50% discount. Valista's system handles accounting of revenue shares between AOL and content providers. Its payment software also includes the so-called 3D Secure authentication technology introduced by the bank card networks to secure transactions?Visa's Verifed by Visa and MasterCard's SecureCode?for customers who prefer to pay by card. By bundling its content, however, AOL stays away from the question of micropayments?transactions under $5, which often bedevil sellers of content online and on mobile networks because card transaction fees render them unprofitable. “AOL's bundles are about getting past that,” says Hurley. On the other hand, the rapid spread of always-on, high-speed broadband service is making such packaged offers more feasible, he adds. “[It's] making it possible for AOL to get products in front of consumers that are attractive,” he says. “Delivery over broadband makes it easier and allows better customer service.” Valista, which specializes in payment software for content primarily on mobile networks, will not say specifically how much the AOL deal means in revenue terms. “It's a multi-million-dollar deal, with a license plus per-transaction compensation [component],” says Hurley. But with AOL, the company gains its first significant foothold in the U.S. market online payments market. It is now targeting portals, Internet service providers, and mobile network operators in North America. “This is our most significant deal in North America,” says Hurley. “Our efforts in the U.S. have been very trial-based up to now.” Valista was formed last year through the merger of two payment software companies, Network365 and iPIN, that derived most of their business from Europe and Asia. Clients include NTT DoCoMo, Vodafone UK, and France Telecom's w-HA.