ARMONK, NY, May 26,1999 (PRIMEZONE) -- IBM (NYSE: IBM) teamed with the duo of First Data (NYSE: FDC) and iMall (NASDAQ: IMAL) on May 18 to provide bundled e-commerce services to small and medium businesses in an effort to compete against Verio (NASDAQ: VRIO).
The deal underscores a monumental move by Atlanta-based First Data, the largest third-party processor of credit-card transactions in the United States, which it has quietly been pursuing since February. Determined to compete with ventures like CyberCash (Nasdaq: CYCH). First Data struck a strategic relationship with iMall to develop a free-standing payment gateway, available since March. Verio, Yahoo (NASDAQ: YHOO), Register.com - and now IBM - have deployed the product. First Data's payment gateway employs an instant merchant account setup feature, unavailable elsewhere.
While all First Data deployments thus far have been in bundles, IBM execs estimate a stand-alone gateway costs between $30 and $50 a month, and 30 cents per transaction.
IBM and First Data plan to market the new bundle jointly.
"We are attempting to bring high-quality brands to this market, and we decided it's time to try to get more attention from our potential customers," says Ed Jenny, IBM global manager. "We won't leave out any route to market."
IBM has offered Web-hosting and e-commerce services since June for monthly fees of $25.95 and $39.95, respectively. Now it plans to add more features to the $39.95 e-commerce bundle through the First Data and iMall partnership.
Whether IBM will join the battle against Verio, which announced its own e-commerce bundle with iMall and First Data on April 6, likely will depend on price.
Verio chose an all-you-can-eat flat fee approach to give merchants all of the functionalities an e-commerce bundle can have. Customers pay $250 down, and $199 a month to get Web-hosting and e-commerce services in one bundle.
IBM decided to take the pay-as-you-go route. While $39.95 includes a merchant account and a 24-item catalog Web site, additional features will cost extra. First Data also has a $300 setup fee, which it will start charging new customers in August.
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