It might be time to back up the Brink's truck on e-payment security, as The Brinks Company launches a new payment processing service.
Following the massive hacking attack and theft at Target that compromised the data of anywhere from 40 million to 100 million customers, there's an air of vulnerability again in credit card processing. That luxury retailer Neiman Marcus may have put another million or so customers at risk creates an even greater sense of risk, but Brinks is known for nothing if not security, and its armored cars have passed on to become an icon of pop culture.
Now it wants to translate that aura into the field of payment processing, and recently announced that in partnership with leading payment processing service provider 2Checkout, it was launching Brink's Checkout, an e-commerce payments service that allows online merchants to accept payments from credit cards, debit cards, and even PayPal.
At $30 billion in volume and hundreds of players, payment processing is a crowded market that Forrester Research estimates will triple in volume to $90 billion by 2017. While eBay's PayPal is the undisputed leader and is the auctioneer's fastest growing business with 143 million active users as of the end of 2013 -- a 5.2 million or 16% jump from the year ago period -- it's clear the lucrative niche is attracting more rivals like Square and Stripe that are making incursions on PayPal's turf.
Billionaire activist investor Carl Icahn thinks eBay ought to spinoff the payment processor as a stand-alone company. Revenues soared 19% to $1.8 billion last quarter, but rather than separate the business, eBay sees payments as integral to its future success, and rejected the proposal out of hand. Just last month it completed an $800 million acquisition of another payments company, Braintree.
Under Brink's agreement with 2Checkout, they will leverage the security brand's well-known reputation with the established payment processor's checkout and cart technology, along with all the attendant gateway services, risk management, compliance, settlement, and reporting technology that goes with it. It will be offered in 196 countries, 26 currencies, and 15 languages.
Despite the cutthroat nature of the industry, and even in the face of PayPal's leadership, Brink's credibility in security could allow it to actually make more than just a go of it here, and become an industry leader itself.
There's a commodity aspect to payments processing that helps explain why many default to PayPal with its backing from eBay. Yet, some analysts contend that many businesses are reluctant to turn over their information to the service precisely because of PayPal's relationship with the site. The Brink's Company can drive a wedge further in by offering merchants a large, well-known name already established in the security field -- meaning it could catapult itself over the many other rivals already in place.
We'll always have hackers probing systems looking for unsecured pathways, so we'll continue to see the Targets and Neiman Marcuses reporting break-ins and thefts. Yet, for those like Brink's that already come with a reputation of trust, investors might want to back up the truck for that opportunity to profit.
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The article The Brinks Company Backs Up the Truck to Payment Processing originally appeared on Fool.com.
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