Banking

Web services: Putting theory into practice

Web services is more than just hype. Read this article to learn how one company, Concord EFS, is using the technology to decrease costs and increase revenues.


In a previous article, we theorized how Web services could help a company earn money by decreasing costs and increasing revenues. Now we will go beyond the theory to see how Concord EFS, Inc., has leveraged Web services to decrease costs to both itself and its customers, as well as increase its revenues.

Concord who? If you have not heard of Concord, then you might consider this: Concord is a NASDAQ 100 company that processed over 9.1 billion transactions in 2001—more than 285 per second!

Integration
When it comes to Internet payment processing, integration is one of the largest hurdles to overcome. If you are trying to set up your Web site to accept payments, you must access what is known as a payment gateway. The payment gateway takes the payment data (credit card number, expiration date, and so on) and passes it to a payment processor. The payment processor is responsible for moving the money from one account to the other.

Depending on what systems are in place, integration between business, payment gateway, and payment processor can be a long, arduous process, taking anywhere from three to six months! Connecting to the gateway can take many forms: dial-up line, leased line, or even satellite. For larger operations, leased line and satellite are the only viable alternatives, and they aren’t cheap—at the very least, they require the introduction of a telecommunications company into the equation.

The Web service
Concord EFS, Inc., has developed a Web services Internet payment gateway named EFSnet. Using Concord’s gateway eliminates the middleman, because Concord provides both the gateway and the payment-processing engine. As a Web services–based solution, it can integrate with most platforms and programming languages.

The Web services initiative began in February 2000 when Concord took the Internet payment plunge by acquiring Virtual Cyber Systems, Inc., an Internet company. Tasked with Concord’s request to build its own Internet payment gateway in late 2000, Don Schroeder, director of product development for Concord’s Web Payment Services, had his finger on the pulse of e-business. Shortly after the Web services standards began to materialize, he received the executive management go-ahead and launched an initiative that holds the potential to transform the payment-processing industry. Through his team’s bold efforts, Concord is one of the first companies to add a new alternative to traditional models for credit card processing.

Decreasing costs
The cost savings is derived from reduced implementation times; integration can be completed in less than a day—from three to six months down to a day! This change amounts to a huge cost savings for Concord’s customers, not to mention decreased time to market.

Show me the money
My first inclination was to wonder why Concord would want to promote a product that would reduce its professional services revenues; after all, the longer the implementation, the more money Concord makes via billable hours. Roy Bricker, senior VP for strategic development, explained that the company derives its revenue through processing transactions; thus, if Concord can bring the client to market more quickly, then it stands to gain because transactions will begin sooner. It’s a win-win situation for both Concord and its valued customers.

Another revenue-generating opportunity has emerged from the availability of the Web service payment gateway. Concord is able to realize an entirely new market, the small business, and even the individual developer who might have been able to afford the traditional alternative.

Prove it
To me, Concord’s Web services solution sounded great. But I wanted proof: Was this system in production, or was it more theory hidden behind smoke and mirrors? While speaking with Schroeder, I asked him to show me that this new approach to credit card processing was indeed an improvement to the status quo. I had previously spearheaded the development of a commercial Web site using Commerce Server 2000 and software such as Cyber Source, so I was familiar with what an implementation involved. After making sure I had .NET installed, Schroeder sent me a test account ID and a document. I knew that if this was a Web Service, all I should need is a WSDL address, so I searched the document for “WSDL” and found a URL. Less than 15 minutes later, I could run and test transactions against the Concord EFS Web service gateway.

Conclusions
We’re not all going to walk into work next week and adopt a Web service strategy. There are many skeptics. In fact, most big business are merely toying with the idea of Web services. Concord has seen the future of e-business with Web services today. Granted, its model is particularly well suited to distributed computing, but the skeptics should recognize Concord’s achievement for being one of a handful of commercially available Web services.

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