Behind-the-scenes payment operation gets e-money capability
Competition for WorldPay muscling up?
Payment processor Ogone has bought up e-money operation Tunz, allowing it to expand into virtual currencies and make the world marketplace a little more real.
Ogone is a competitor to WorldPay, so merchants sign up with Ogone to accept payments using credit cards as well as alternatives such as PayPal or iDEAL depending on the country. Ogone already offers currency conversions which push it towards becoming a bank, so by acquiring Tunz is makes that jump without exposing itself to the full rigour of banking regulations.
Tunz isn't a proper bank, it operates under a "Bank-Lite", e-money, licence. That licence will keep it a separate legal entity even after the acquisition, so Ogone can continue to provide payment services using Tunz whenever those services get a little too close to banking.
Ogone won't say how much it's spending on Tunz, which currently belongs to the two founders with the exception of Belgacom's 40 per cent stake, but once the transaction is completed the whole company and its ten existing employees will belong to Ogone. Ogone then plans to triple the size, pushing into new markets, while increasing its own operation from the current 250 people to 350.
Those 250 people are already providing payment service to 35,000 merchants, mostly around Europe but also in India and elsewhere. Ogone isn't a public-facing brand, unlike WorldPay, but it provides white-label services to customers such as Barclays in the UK, who resells the service as part of its ePDQ brand.
One area Ogone is particularly interested in is virtual currencies, which are offered for in-game transactions or intra-platform offerings (such as Facebook credits). Many companies offering such virtual money aren't properly registered right now, and Ogone reckons there's an opportunity to offer white-label banking before the regulators get too annoyed.
With new currencies popping up all the time, and the 250 payment mechanisms listed by WorldPay making international transactions increasing complicated, there's certainly a need to make lives easier for merchants. Ogone reckons with Tunz on board it can enable a merchant, such as a UK shop, to accept payments from a locally-unknown operation such as Axis iConnect (used by 13 per cent of Indians), just as it can enable an Indian store to take Sterling transferred from PayPal.