INVESTMENT
Deal values Orbiscom at USD250 million
05-10-2000
by Paul Drury
Irish electronic payments company Orbiscom is now valued at USD250 million, following the sale of a 4.9 percent stake on Wednesday for USD12 million.
It is believed the purchaser (from telecoms and credit card services group ITG) is US investment house Capital. Other investors in Orbiscom, which is chaired by entrepreneur Paschal Taggart, include AIB, Goodbody Corporate Finance, GLG Partners (a division of Lehman Brothers) and Enterprise Ireland.
ITG, which previously held a 14.56 percent stake which it bought for USD5.5 million, still retains a 9.7 percent shareholding. The company is expected to float in the middle of next year.
Orbiscom, which has developed a method of allowing credit card holders keep their numbers secret when they shop on-line, stands to earn monumental revenue from its technology.
In a pilot scheme in operation with five percent stakeholder AIB since April, the bank's customers are issued with a unique, "disposable" credit card number every time they make a purchase on the Web.
Orbiscom charges a licence fee to the bank for the technology, which it has secured with more than five patents in 100 countries. But more significantly for future revenue growth, it also gets a "minute" share of each credit card transaction.
Internationally, Visa and Mastercard process USD2 trillion a year in credit card transactions, with that figure set to grow to USD14 trillion by 2010. American Express has developed a similar product, Private Payments, which was launched in the US last month.
The Orbiscom technology can also be used offline. A shopper who wants to purchase goods over the phone, for example, using a credit card, can use the software to generate a one-time credit card number just for that purchase.
Orbiscom's "virtual credit card" is a small, free software programme that resides on the customer's computer. In the case of the AIB scheme, the software window is the same size, shape and design of an AIB Visa card. After the customer has entered personal details into the software, including name and postal address, it is ready to use at any e-commerce Web site. AIB's application of the technology is branded as TransactOnline.
Orbiscom was founded in Ireland in June 1999 and earlier this year completed second-round financing. It recently said it intended to quadruple its Irish workforce by year's end and has already doubled staff numbers to 60 since February.
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