Ericsson takes stake in Japan's eBANK

Jalda platform aims to be the open standard for online payments.

Ericsson has taken an equity stake in Japanese e-commerce company eBANK as part of an agreement that will see eBANK using the SAFETRADER internet payment server developed by EHPT, a joint venture company of Ericsson and Hewlett Packard.

Ericsson paid Ñ100 million ($859,000) for 2% of eBANK, an online payment specialist that expects to receive a banking license from the Ministry of Finance by the end of March. It’s the first time Ericsson has taken a stake in a payment partner that’s using a SAFETRADER payment server.

“It’s seen as more of a symbolic gesture,” says Sabine Ehlers, EHPT’s regional manager of the relatively small investment. “We would only do something like this because it’s a great chance to boost e-commerce in Japan.”

SAFETRADER is based on Jalda, a non-proprietary, open system developed by EHPT to enable easy and secure financial transactions online from any device with internet access. While EHPT is promoting its own SAFETRADER payment server based on Jalda technology, other companies are welcome to develop their own payment system based on Jalda, and programming APIs (application program interface) are available on the internet.
According to Ehlers, one of the key advantages of Jalda - besides its industry standard security provided by RSA Public Key Infrastructure - is that it offers the content provider total flexibility in how they want to charge for their product and offers the payment provider total control of the revenue flow.  

E-commerce in Japan is currently dominated by NTT DoCoMo’s iMode service, through which consumers can have the cost of products and services they access online added to their monthly phone bill.        

“But their system isn’t very flexible,” says Ehlers. “A service is either free, or it costs subscribers Ñ300 a month. That can stifle content provider’s creativity.”

Jalda works differently, with the APIs allowing calculations of metered payment down to a fraction of a cent. A content provider, in Jalda terms, is any provider of goods and services sold or distributed over the internet. A system provider is the party that integrates, maintains and updates the payment technology and and a payment provider is an intermediary that offers account and billing services.

Often a company using the Jalda system can fulfill all of these roles itself. For example, a large mobile phone operator might offer the latest ring tones over the internet at a small cost and add that to a customers phone bill. That same operator might also act as a system and payment provider for another company with content to sell.

eBANK is a specialist payment provider and is relying on its banking license and links with a wide range of other companies to help promote e-commerce in Japan. After beginning with small payment via PCs in April, the company is planning to provide real time services via mobile phones, retailers and vending machines.

Content providers and payment partners without banking licenses such as telecom companies or ISPs  usually set a spending limit on their Jalda systems to avoid moving too far into the credit providing business. But companies like eBANK with banking licenses, can do higher value transactions and so offer business solutions, or e-commerce for high-end consumer goods.

Of  EHPT’s many European customers for SAFETRADER, WorldOnline is looking at opportunities for its payment services in Asia, and WISH, the largest ISP in the Netherlands has also established a venture in China with

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