The Hidden Drawback of Consolidation

Internet trust and payment services company VeriSign, which picked up a number of customers and other assets from CyberCash last spring, is quietly moving former CyberCash clients to its own payment services operation.

But the transition plan apparently isn’t so quiet to some of those affected by the move. For example, Jeff Breitner of Gatecom.com indicated via email that he was a little concerned and confused. VeriSign sent out an e-mail giving his ISP until Oct. 2 to migrate all existing CyberCash customers into VeriSign’s Payflow-Pro.

And Breitner is not alone. The move underscores the downside of the era of consolidation that dot-com companies were forced to undergo in order to survive. Aside from all the layoffs and clashes in corporate culture, merger integrations have wreaked havoc on both vendors and customers alike.

Mountain View, Calif.-based VeriSign first announced its intentions to acquire the Cybercash assets out of bankruptcy last April. In a release, the company said it was acquiring CyberCash’s North American payment services operations while First Data Merchant Services was acquiring the software side of the business.

VeriSign said then that it was “developing a plan to integrate CyberCash’s payment services assets and customer base into its core payment services unit.” And, at the time, VeriSign was quick to highlight the fact that the deal would double the number of its payment services customers, from 20,000 to 40,000. VeriSign’s Payment Services allow online merchants to process a variety of payment types, including credit, debit and purchase cards, Internet checks and automated clearing house (ACH) transactions over the Internet.

But, not much had been heard of since then. That is, until now.

A former CyberCash customer close to the situation provided InteretNews.com with a copy of a recent e-mail from VeriSign, headlined “IMPORTANT CYBERCASH MIGRATION NOTICE.”

The e-mail went on to say that “Our records show that you are currently registered to process payments through the CyberCash payment gateway. Your account is currently scheduled for migration to VeriSign’s Payflow service on or after October 2, 2001.”

“No changes are required to your merchant account, or your credit card processor/bank and we do not anticipate any significant changes to your Web site integration,” the e-mail said.

One administrator affected told InternetNews.com that “it really should amount
to just building a translation system for the various CyberCash commands to map them to VeriSign commands and then give people access to VeriSign’s management interface.”

However, the source added that “I never believe that totally, especially when they say ‘should’ instead of ‘will’ be.”

Breitner later added that “I’m still concerned about the merchant administration screens because my customers are calling and are quite confused about what changes are necessary. I’m fairly certain that I’ll have to give some form of tech support in helping them get acquainted.”

Chris Wynne, general manager of VeriSign’s payment services group, acknowledged that there have been some problems in making the transition.

“One of the problems we’re coming cross is that larger ISPs and ASPs have enough staffing in-house to handle the transition, while smaller ones have fewer resources and something like this can be a little more painful,” Wynne told InternetNews.com.

He said all partners and merchants have had at least the contractual two weeks notice, and more in many cases.

Asked why not just run both platforms, Wynne said that the CyberCash platform is older and while it was innovative at the time, it is not as up to date as the VeriSign technology, which “is a lot more secure and built on a more modern infrastructure.”

“There is going to be some short-term pain, but we believe that there is going to be a tremendous amount of long-term benefit for our merchants and partners,” Wynne said.

Meanwhile, Verisign continues to absorb the acquisition. On Tuesday, Reuters reported that it sold off the Indian unit of CyberCash to Tarang Software, an India start-up specializing in wireless and Internet software, for an undisclosed amount.