SMALL BUSINESS | SAFETYPAY

Miami Beach firm touts safe way to pay online

 

A Miami Beach company is trying to fill a niche by offering an Internet payment system as an alternative to using credit cards.

 

Manuel Montero, founder and chief executive officer of SafetyPay,  at his office in Miami Beach. The company partners with banks to allow people worldwide to order online and pay directly from their banks.
Manuel Montero, founder and chief executive officer of SafetyPay, at his office in Miami Beach. The company partners with banks to allow people worldwide to order online and pay directly from their banks.
AL DIAZ / MIAMI HERALD

icordle@MiamiHerald.com

Whether you live in Miami, Mexico City, Madrid -- or almost anywhere else -- the Internet lures you with all its shopping options.

But what if you don't have a credit card, fear fraud or identity theft and perhaps you are purchasing something from a merchant in another country that won't accept your card?

SafetyPay, a Miami Beach company, is trying to fill that niche, offering an Internet payment system as an alternative to using credit cards.

Founded by five former American Express executives and backed by venture capital funds, the 2-year-old company is growing and hiring more employees. And its next frontier is mobile, which it is already testing.

Despite the recession and competition from larger, more well-known and better capitalized competitors, it's a small business surviving by discovering a worldwide need and then crafting a service to meet it.

``SafetyPay was created because we believed -- and we knew -- that the existing payment system, i.e. credit cards, could not do the job for all parties involved in the Internet,'' said founder and chief executive Manuel Montero.

SafetyPay works by partnering with banks and merchants to allow their customers to pay for online purchases directly from their bank accounts. It started in 2008, but its founders worked for about two years before that to lay the groundwork -- designing software, registering trademarks and analyzing the industry, Montero said.

Their research showed that three market segments were not being served: people who do not have credit cards, people who have credit cards but are afraid of fraud or identity theft, and those who use credit cards but when they shop on the Internet internationally, they find that merchants will not accept them.

The key was finding these customers, said Montero, 60, who is originally from Spain and was formerly CEO of Fiera.com , general manager of American Express Spain and division vice president of American Express, where he was responsible for the launch of the company's Latin American business.

The solution was to work through banks, which already have millions of online banking clients, he said. SafetyPay shares revenue with banks, in exchange for making its service available to their customers and providing joint promotions.

For banks, it turns online banking into a new revenue opportunity, Montero said.

SafetyPay has 23 banks signed up worldwide, which combined have 17 million online customers. Among the banks are ScotiaBank, Citibank Banamex, Santander, Banco Nacional de Costa Rica, Bancomer, Ibercaja of Spain, Bank of Austria, Banco de Credito of Peru and Banrisul of Brazil.

Another Brazilian bank is expected to join early this year.

Lima-based Banco de Credito has seen more than 1,000 SafetyPay transactions per month, said Christian Burger, commercial executive of business services for the bank.

``It's a very innovative mechanism,'' he said.

On the other side of the transactions, SafetyPay has 1,300 merchants worldwide, including Sears, Nike, Aeromexico, Palacio de Hierro and Peruvian Airlines. Its goal is to add another 300 foreign and 1,000 U.S. merchants this year.

Jean Pierre Matallana, sales manager at Peruvian Airlines, said ticket sales through SafetyPay have been increasing each month.

``It's a very good option for us,'' he said.

Similarly, Miferta.com , a discount offer site in Costa Rica, has about 25 percent of its clients -- or between two and 15 a day -- using SafetyPay, said Jack Raifer, marketing sales manager of Miferta.com.

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  • I just found a place called "printapons" where I can get my fav. restaurant coupon for 90% off!! all you have to do is just print and take it.
  • I don't get it. I have a credit card with my bank. Why would I want to use SafetyPay if it's going to remove funds from the same account? And, what is the fee for such a service? If it's not competitive with what my bank is charging, why would I want to use it?
  • Hello Gumsandals!

    The difference is that you do not have to plug in your credit card/debit card number online on the merchant sites. Our integration with your bank allows for you to simply log in and approve the transaction before it is deducted, it's that simple! SafetyPay also allows for you to shop anywhere in the world and pay in your local currency regardless if the merchant accepts your local currency because this is a service SafetyPay offers its customers. For more information, visit www.safetypay.com.

    Thank you.
    Maribel Garcia
    Head of Marketing, U.S.
  • Paypal works just fine.
  • This inst new, Google has Google merchant, then there is PayPal. Each is slightly different in their way but essentially they do the same job. Google merchant is very effective not only because its safe but it also makes the checkout process faster. For safetypay to become a significant player in online retail they have to offer the merchants a strong incentive that google, paypal or any other merchant service doesnt offer..
  • They are the "same" as in alternative to credit cards. As far as how they function, they are entirely different than google "checkout" and PayPal where you plug in your credit card information. The target audience are those who cannot or do not pay with credit cards if they are overseas and they would like to purchase from merchants in the US from their online banking account. On the other hand, if they are US customers, SafetyPay is the only payment solution in the market that does not require any disclosure of financial information. For more information, please visit www.safetypay.com.
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