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Payment options proliferate online

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Only a few months ago, there were hardly any non-credit card e-payment platforms available to e-hub users. Suddenly, the space is getting crowded.

Since Aug. 21, three high-profile announcements have been made regarding non-credit card e-payment platforms:

• Actrade International Ltd. introduced a proprietary e-payment system.

• Ariba Inc. detailed plans to begin offering Escrow.com’s platforms.

• Miradiant Global Network Inc., a b-to-b Internet payment start-up backed by J.P. Morgan & Co., launched.

These announcements came just weeks after the biggest non-credit card e-payment company debuted--Citigroup-backed Finan-cialSettlementMatrix.com.

There is no disputing the need for platforms that allow big-money deals struck in e-hubs to be safely paid online. E-hub orders are getting larger and more global in scope every day, and the limitations of using credit cards for huge purchases are many. The question is whether there is enough room for so many e-payment companies.

Credit card limitations

Simple b-to-b exchange purchases--say, a $7,000 deal between a Houston seals and gaskets maker and a St. Louis auto dealership--are routinely paid using credit cards. But one can imagine the skittishness of an executive from that Houston company in accepting a $700,000 e-hub purchase on a credit card from a Kuala Lumpur motorcycle plant owner with whom he has never dealt before. Not to mention the reluctance of the plant owner to send his credit card number over the Internet for such a mammoth buy.

Actrade International is introducing E-Tad--short for electronic trade acceptance draft--to take the uncertainty out of such transactions. The idea is that Actrade will certify creditworthy companies to use E-Tad, a deferred payment platform for purchases with terms of up to 180 days. Big banks, such as Bank of Montreal and Summit Bancorp, assist Actrade with settling the online transactions.

Currently, buyers must be based in the U.S. or Canada, though sellers can be located anywhere. Actrade will eventually allow European buyers to participate in the system, Actrade President Alexander Stonkus said.

Stonkus said Actrade, a small company, will get plenty of visibility--and users--by marketing E-Tad through strategic partnerships with consultancies and financial institutions.

Instant credibility

One clear advantage Escrow.com has is that Ariba will market its platform to users of all its exchanges. This gives the small Santa Ana, Calif.-based start-up instant credibility.

Its e-payment system, which offers escrow services on the Internet, is simple. Like all providers of trust services, Escrow.com acts as a go-between, holding payments until both buyer and seller agree they are satisfied with the transaction.

Ariba went with Escrow.com’s platform because it allowed for an end-to-end solution for users, something the exchange kingpin couldn’t offer before, said Randy Joss, Ariba’s director of commerce services. ‘‘We’re integrating the buying and paying process for the first time,’’ he said.

Miradiant has a broader model and will be concentrating not only on e-payments but an array of financial dealings. For example, it will offer online bill presentment, multi-currency payments and invoice dispute platforms, said Christopher Hanan, VP-product management.

Like its competitors, Miradiant will target exchanges. But unlike them, it also will market its platforms to any company that wishes to bypass exchanges and set up a proprietary Internet finance platform.

‘‘It encompasses exchanges and goes into the real world,’’ said Hanan, who before joining Miradiant co-founded e-Steel Corp.

J.P. Morgan and MSD Capital, Michael Dell’s investing firm, are among Miradiant’s venture capital partners.

All the companies face their most formidable competition not from each other, but from FinancialSettlementMatrix.com.

The start-up’s backers give it instant credibility and branding power; it is jointly owned by Citigroup, Wells Fargo & Co., S1 Corp., Enron Corp. and i2 Technologies Inc.

Additionally, the site’s one-stop-shopping model will likely appeal to exchanges.

FinancialSettlementMatrix.com offers an array of e-payment services, ranging from escrow to electronic fund transfers.

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