TNT Post challenges banks for online payment collection

Managing a company''s accounts receivable has long been the mainstay of banks. TNT Post Group steps into the market to offer retail e-merchants an alternative.

E-merchants in Asia can now outsource their receivables collection to TNT Post Group, a provider of mail, express and logistic services. Merchants selling to consumers via the web will only have to deal with one interface for payments, in place of multiple interfaces with different banks and payment companies. The service, called WebCollect, is part of the services offered by GlobalCollect, a subsidiary of the group.

The WebCollect service will be directly competing against those offered by banks, which is the traditional choice for companies wishing to outsource their cash management process.

Here's how WebCollect works: Customers of e-merchants can choose to pay for their online purchases via four methods - credit card, bank transfer, invoice or cheque. Only the credit card service is online, the other methods are conducted offline. With credit card purchases, WebCollect will check credit details for an online authorization and all authorized payments are designated "to be settled only". Then GlobalCollect passes all payments to the credit card companies, reports back to the e-merchant and transfers the funds.

With offline payment methods, GlobalCollect will give its bank account details (GlobalCollect banks with HSBC in both Singapore and Hong Kong) or posts an invoice to the consumer. The consumer then authorizes its bank to transfer funds, in local currency, to GlobalCollect's account. The company will then match the receivables information from the e-merchant to the payments made to GlobalCollect's account, and transfer the matched funds to the e-merchant's own account.


WebCollect claims the advantages that its services are global and that it accepts four payment methods. Says Michael Nederlof, vice-president marketing and sales at GlobalCollect: "WebCollect is cost effective due to the flat-fee structure. E-merchants would have to spend one to two years to set up an international payment structure themselves … WebCollect [can] set up a complete international payment structure for e-businesses within four weeks."

Samantha Lyon, Pacific region marketing manager for TNT International Mail, says that the advantages for consumers are three-fold: "WebCollect offers consumers 3 Cs -  control, convenience and choice. Control in the form of selecting the option of payment, be it online or offline; convenience in being able to pay in their local currency; and choice in the form of payment via bank transfer, cheques, giro and credit card." Consumers, by dealing only with their local bank, need not pay any international telegraphic transfer fees.

E-merchants pay a flat fee for the processing of cheques and bank transfers, and with credit card transactions, GlobalCollect will take a percentage of transaction amount. No details as to figures were released, however, Lyon of TNT says that the pricing will be "volume driven".

 WebCollect has yet to sign on any e-merchants or portals in Asia, but Lyon says that the response in Asia since its Asian launch on 27 July has been "overwhelming". A prominent customer of WebCollect in Europe is (part of Apple Computers). No projections of the volume of transactions expected through WebCollect were revealed, though Lyon expects that WebCollect will only add to the growth of GlobalCollect.

GlobalCollect, which specializes in offline payments for bricks-and-mortar merchants, has been operating for six years. The company deals with five million transactions a year, amounting to $500 million, and has had an annual 50% growth for the last three years.

The TNT Group created GlobalCollect to leverage off its existing customer base, and to provide a value-added service on top of its distribution network.

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