By Allan Maurer

ATLANTA—Despite strong competition in the online alternative payments space, Moneta offers two compelling differentiators, says CEO Guido Sacchi. First, Moneta lowers the cost to merchants of accepting online payments by about 50 percent. Second, it provides a way for banks to create revenue from the alternative payments space.

That’s particularly important to Moneta, because the company partners with financial institutions to give them a brand presence at merchant checkouts online. “It’s a real pain point for banks. They don’t see revenue flowing from alternative payments today,” says Sacchi. “They have been pushed to the sidelines in online transactions.”

So, he says, they are interested in a system that brings them a new revenue stream.

The system allows online merchants to accept and process ACH and card payments, and gives consumers the ability to pay directly from checking accounts.

“For consumers, it provides security, safety and convenience,” says Sacchi. Consumers receive an electronic wallet when they set up a Moneta account, so they do not need to give personal information to each merchant.

Moneta evolved from Checkfree, which developed the technology and launched it in 2006. Private equity investors bought the Checkfree assets and Moneta launched two and half months ago.

It has raised about $10 million from private and angel investors, counting the Checkfree purchase price.

The ten-employee company is looking for a $6 million Series A round of investment capital.

Moneta’s system is already an option on Delta Airline’s Web site checkout and has ten top Internet merchants signed or committed, Sacchi notes. “Airlines are a good vertical for us,” he says. “They obviously do a lot of business online and have relatively high transaction fees averaging $400.”

Leveraging resellers with established merchant relationships is part of its go-to-market strategy. The company also has a partnership with airline transaction processor UATP (Universal Air Travel Plan) which makes Moneta’s system easy to implement.

The market opportunity for alternative online payment systems is huge and growing.

Bernstein Research says online commerce is expected to rise from $226 billion in 2007 to $361 billion by 2010. Traditional credit cards are expected to hold onto a significant share of that business, but alternative payment methods capture a growing chunk.

Moneta quotes Javelin Strategy and Research, which says alternative payments will account for 30 percent of total online transaction volumes by 2012.

Moneta has additional features in development for its product, including pay ahead or pay later options and the capability to extend transactional credit at the point of sale, as well as the ability to accept gift cards. The new features are planned for Q2 2009.

Although Sacchi freely admits there is heavyweight competition in the alternative payments space, from eBay’s Paypal and recently purchased BillMeLater, he isn’t afraid to compete.

But, he says, “The best player is going to win the prize and we’re willing to play in the space. We haven’t seen anyone else doing the bank strategy. We’ve only been at this two and half months and the way it has resonated in the marketplace is astounding.”

On the Web: www.monetacorp.com

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