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Another U.S. Alternative Payment Service by Noca
A new alternative online payment service has been launched in the U.S by former Visa employees. The company, Noca, is initially focusing on micropayments, although its eventual goal is to facilitate online payments for purchases of all sizes.
In particular, Noca aims to offer online person-to-person vendors such as eBay sellers a cheaper method of receiving payments than existing platforms such as PayPal or Google Checkout. It is also expected to offer payments facilities to e-commerce merchants.
TechCrunch reports that Noca has launched two “beta” micropayment services on the Facebook social forum Website. One is a service that enables users to transfer funds from their bank account to their friends, while the other allows them to make donations to charities online.
Noca works by letting consumers enter their checking account information online instead of credit card numbers. This allows Noca to offer much cheaper payment-processing fees than the 2-3 percent levied on card transactions.
By avoiding fixed per-transaction fees, Noca aims to undercut services such as PayPal which allow shoppers to register a credit card number, and then use this card account to fund purchases without disclosing the details to vendors. TechCrunch points out that PayPal is obliged to pass on to vendors the transaction fees that it is charged by credit card companies.
Around US$5 billion goes towards online transaction fees every year in the U.S. alone. Since online vendors have particularly slim profit margins, Noca thinks the near elimination of transaction fees would be a huge boon for them.