Saturday, May 3, 2008

ATMDirect President's Response to Open Letter

On Thursday, I received a telephone call from Nandon Sheth, the President and new owner of ATMDirect. We had a pleasant conversation and Nandon addressed a few of the issues made in "An Open Letter Letter to ATMDirect".

Regarding the "PIN-OFF" Challenge which HomeATM invited ATMDirect to participate in. Nandon replied that he would rather have the "marketplace" decide which technology emerges to the forefront. We have no argument with that logic as that was the reasoning behind challenging them to the PIN-OFF in the first place.

Apparently a panel of industry experts are not part of the marketplace in his view.

In our view, especially in light of the recent Digital Transactions News article "PIN Debit Meets the Web," a "PIN OFF" would, in fact, be tremendously influential in deciding who, as the graphic on the left states, the next president should be.

A debate sways the marketplace in an election, we just want the super-delegates to be there for this one. Call it our conventional approach to a PIN-OFF.

Personally, I am of the opinion, that a panel of industry experts, (super-delegates in my analogy) comprising of EFT Network representatives from First Data's Star, Metavante's NYCE, and Fisev's Accel Exchange, (along with Industry Analysts, such as Gartner's Avivah Litan or Javelin's Bruce Cundiff) would bring significant attention to both technologies and thus become an "enabler" in terms of letting Internet Retailers know the results.

One doesn't have to win and one fail...both could pass the muster, which, again, would provide Internet Retailers, EFT Networks and Industry analysts, with the information that is obviously lacking, based on the Digital Transaction News article.

Of course, one (or both for that matter) might not "pass the muster" in which case, both entities would at least know what they had to accomplish in order to provide a solution everybody agrees is viable.

So whatever the reason, ATMDirect has "Officially Declined to Participate in a PIN-OFF". That's too bad. Had they agreed and both companies compared technologies, it would have made for some good media and market exposure to both sides. I guess it would safe to assume that, at leaset at this stage, HomeATM is a bit more confident in their technology.

Nandon went on to say that he thinks it would be better to work together with HomeATM rather than "square-off" against each other. As I just mentioned, I am not of the opinion that it is "squaring-off" as much as I believe in furthering the understanding of both technologies to key players in the industry.

With that said, I certainly respect his business philosophy of working together. Both HomeATM and ATMDirect do share a common goal, which is to further enhance the payments landscape by introducing a PIN Debit solution for Internet Retailers. I'm not quite sure how he would propose working together. but HomeATM is certainly available anytime to hear any proposals to that end.

By the way, just so I am clear on the issue. I believe competition is a good thing, as it has always motivated companies to produce better technology, better products and better pricing, thus the end-user is always the ultimate beneficiary in a free marketplace.

Getting back to our conversation...I explained to Nandon that HomeATM doesn't have any type of vendetta or ill-will against ATMDirect. I did tell him that we were however, taken aback by some of the statments made in their press release.

One had to do with the number of patents they claimed to have bought from Pay By Touch. Nandon informed me that maybe I didn't see the complete documentation (I don't know how that would have happened) and that they have accomplished a lot since taking over ATMDirect 30 days ago, but couldn't elaborate or "pin it down" for me on account of the fact that it was Intellectual Property and we are the competition.

Regarding the statement made by Rajiv Grover, an investor in ATMDirect who said. “Our intention is to own Internet PIN debit" Nandon replied that Rajiv was overly enthusiastic and, in hindsight, maybe should've toned down his enthusiasm a little bit. I understand enthusiasm. If there was a top ten list of the people enthusiastic about bringing PIN Debit to the Web, I am certainly, without a shadow of a doubt, on it.

Let me remind you, that I did the Pay By Touch Blog from December 2005 through March of this year when they closed their doors. Go ahead and visit PBT's Blog site and do a search for ATMDirect. I have consistently praised their intention of bringing PIN Debit to the Web and even went so far as to go on the record that ATMDirect could potentially be Pay By Touch's "Cash Cow." I was probably one of their biggest supporters.

Let me also remind you, that because of my enthusiasm for both the market and the potential, I looked at acquiring ATMDirect. I certainly had the backers to come up with $600k, even more, but the one thing that concerned me is apparently the same issue that concerns one industry analyst. (click picture on left to read her analysis)

In fairness to ATMDirect, another industry analyst, said that he believes the floating PIN pad is secure and that people he knows "have signed off" on it. Hmmmm. there certainly seems to be some confusion in the marketplace. I wonder if that could be alleviated with published results of a "PIN-OFF"?

In hindsight, instead of calling it a "PIN-OFF" maybe we should have called it "The Show Case". That may have been something that Nandon would have been more willing to participate in. Indeed, we will be "showcasing" our technology, as will he, to quite a few interested parties in the near future. Why not have a professional upfront evaluation already a matter of record for all interested parties to see?

For the record...HomeATM is game as we feel our technology is at the PINnacle!

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