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A new PSD-approved Payments Institution starts business

Nick Ogden, CEO and founder of Voice Commerce (he previously created WorldPay, the RBS payments unit, back in 1993 and sold it to them in 2002*), recently spoke at the FSClub about using voice biometrics as part of authentication in mobile financial transactions.

Who are Voice Commerce Group?  Best to read what they say about themselves:

“The Voice Commerce Group was founded upon a simple principle ‘whenever we speak we establish a position of trust’. Consumers use their voices to communicate decisions; perhaps to instruct, to agree or to buy something. This natural process already happens automatically billions of times every day and the Voice Commerce Group has taken this natural capability and automated the process through its innovation in voice signatures.

“Voice signatures allow consumers to use their own unique voice to sign and authorise transactions, and their patented technology now lies behind worldwide standards for mobile trust. Using voice signatures guarantees transactional security when making a payment and protects users against personal data compromise. Voice signatures are complex devices that combine the use of voice biometrics with transactional history, trends and patterns to create a highly secure, unique authorisation environment. The system can deliver two factor identity authentications virtually anywhere. Authorisation failures, suspected imposters or potential fraudsters can be controlled and managed and transactions re-qualified using automated outbound IVR. This not only improves customer service but reduces the risk of fraud and identity theft.”

Why am I giving them a plug here?

Because, during the evening at the FSClub, Nick mentioned that Voice Commerce were one of the first Payments Institutions (PI) to register with the FSA, after the PSD was transposed last November and were about to announce that they are also one of the first PIs to be accepted as a Principal Member of Visa Europe.

The announcement was released this morning, so now is the time to talk about it.

What does being a Principal Member of Visa Europe mean?

The membership means Voice Commerce can start providing its own payment services to businesses including acquiring payment transactions.

Following the launch of the PSD in November 2009, Visa Europe confirmed that Payment Service Providers such as Voice Commerce, as defined in the PSD, would be eligible to apply to become members of Visa Europe. Subject to stringent risk management requirements and being capable of complying with Visa Europe’s operating regulations, the Voice Commerce application was approved by Visa Europe at the Board of Directors Meeting in February 2010.

Nick comments that: “as a Payment Institution, Voice Commerce is regulated in exactly the same way as banks in relation to capital adequacy and regulatory responsibilities for payment services. Being granted Visa membership means we can further compete on an equal footing across Europe with our banking peers. Our next move will be to grow the business and bring fresh creativity to the industry using innovative payment services, including voice biometrics to authorise payments.”

Voice Commerce also describe themselves as being “authorised by (the) UK Financial services Authority under the European Commission Payment Service Directive, and regulated in the provision of e-money services”. This means that they have to “maintain appropriate financial capital adequacy”.

Interesting.

Very interesting.

Particularly interesting as the firm that Nick created, WorldPay, is now up for sale with a price tag of £3 billion ($4.5 billion).

Bidders include private equity firms Advent
International Corp; TPG Inc.; Warburg Pincus LLC; Kohlberg, Kravis
Roberts & Co; Permira; CVC Capital Partners, Blackstone Group LLP and The Carlyle Group LLP.   Tsys, Atos, ChasePaymentTech and First Data are rumoured to be in there .. and IT firm Voice Commerce Group, whose
chairman and chief executive officer is Nick Ogden, the founder of
Worldpay, is making a bid to get them back too!

From Lafferty Card News:

“A skilled management team has already been assembled as part of the acquisition offer that will include the existing team at Voice Commerce. The team has appointed Montrose Partners, specialist financial advisors, to assist in their bid … the value of Ogden’s bid for RBS WorldPay has still to decided, but he said Voice Commerce has substantial support from a number of private equity firms.
When asked when a deal might be completed, he said: The expectation from UBS, who are handling the deal, is hopefully by August 2010. The process of due diligence is now taking place while they attain the position and value of the company. Following this period, UBS are expected to produce a sales memorandum in January 2010. Voice Commerce then predicts an 18-month separation process of the business, at which point the full extent of the deal will become clear.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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