Spotlight: CyberSouce

After catering to giant retail firms such as Wal-Mart and Nike in developing moneymaking Web sites, CyberSource is taking its experience to the interactive gaming sector.

This month the company is rolling out its eGaming Compliance Solution and his hoping the new system will solve a number of problems that are plaguing the industry.

The idea behind the solution is to bring together various tools operators are forced to use to monitor their site and protect themselves from fraud and credit card charge backs. The solution integrates verifying a players location and age as well as checking local blacklists, jurisdiction rules and even does credit card and check processing.

Jeff King, CyberSource's director of product management, feels the challenges that the interactive gaming industry are facing right now are similar to those that giant retailers faced two years ago when they were trying to keep costs down but yet still use the Internet as another distribution channel for their products.

The Company

In 1994, co-founders Bill McKiernan and John Pettitt started one of the world's first Internet shops, Software.net.

Its goal was simply to sell software over the Internet. But online customers were reluctant to purchase unless their buying experiences were completely secure, simple, and seamless. McKiernan and Pettitt realized they would need a comprehensive back-office solution to automate the sales process and to increase customer security.

The company built its own automatic payment processing system, global tax calculation engine and export control system.

Software.net soon discovered that the growth in Internet commerce was accompanied by an equally explosive growth in Internet fraud. Early on, a lot of Software.net orders proved to be fraudulent. The company created one of the first real-time identity verification systems using a unique, automated "profiling" algorithm. Fraud losses soon plummeted to less then 1 percent.

Confronting the same problems CyberSource had already solved, major companies like Apple, Adobe, Microsoft and Symantec sought support of their own eCommerce efforts. Because of its extensive expertise, CyberSource was a logical choice to provide proven electronic payment and risk management solutions.

CyberSource soon became an industry leader in providing reliable real-time back-office commerce solutions.

Today the company has over 3,000 business customers and processes millions of transactions monthly. Its customer list includes Fortune 1,000 companies from Compaq, CompUSA, Home Depot, Nike and Wal-Mart, Harley Davidson, Ford, Nokia and AT&T.

The Product

With eGaming Compliance Solution, CyberSource is releasing its first targeted product for the interactive gaming community. The firm has long specialized in credit card transaction solutions and other areas that were of value for the gaming industry, but now is offering an industry-specific product.

The company is billing the product as the first all-in-one software and services solution with essential age and jurisdiction verification and fraud detection features. In addition to system has built in features designed to reduce exposure to fraud and conform with regulatory compliance guidelines associated with expanding operations through the Internet.

The comprehensive solution is designed to enable gaming operators to:

Verify age. Operators can restrict minors from accessing to their system.
Verify residency/location of player - Geo-location options can block out users from restricted jurisdictions.
Detect fraud - Fraudulent use of credit cards can be blocked in real time.
Share blackbook data - The system enables operators to compare and check new users with those that have been blacklisted from other gaming sites.
Host a private a blackbook - Operators can keep blacklists private and check new users and their information with a pre-existing list.
Process electronic payments - Operators can run their credit card authorizations and processing through the system using more than 150 currencies.
Manage player acceptance - Using a database, operators can determine a player's location and determine if regulations are met for the jurisdiction the player is based out of, or the gaming operation is centered in.

The Future

CyberSource eGaming is scheduled for release later this month. Additionally, each component can be purchased as a separate unit; or sub-sets of them can be bundled to create a tailored solution to meet specific needs.

King said the combined solution will enable CyberSource to strengthen its position in the interactive gaming community.

"Because maintaining regulatory compliance has been a challenging hurdle for gaming operators to overcome and the risk of fraud is so high on the Internet, there has been limited adoption of the online channel within the regulated gaming industry," he said. "We are confident the new CyberSource eGaming Compliance solution, which leverages proven technologies and services that CyberSource has used to help well-established traditional enterprises safely sell online, will help increase momentum and the possibilities for gaming operators to expand their business via the Internet."

King said pricing for the system varies. The cost, he said, depends on how elaborate an operator makes the system and how often it is used. The company hopes to sign up 12 licensees for the service within the first year of rollout, and King predicts that once the system is integrated into a dozen or so sites, the idea will snowball and more and more licensees will sign up for the service.