Ecommerce start-ups lash out at 'archaic' banks

NEWS Online commerce will flop again in the UK this Christmas because banks still refuse to support emerging online traders. E-payment specialist, Trintech, issued this warning after meeting with top officials from many of the UK's banks and credit card companies over the last few weeks. To take payments over the Web, a company must obtain a 'MerchantID' from a credit card issuer, which allows it to incorporate a payment facility on the Web site. Consumers will be more likely to buy on a site featuring credit card facilities. But according to Trintech CEO, John McGuire, UK banks are refusing to offer this to emerging '.com' companies because they're concerned about a lack of trading history. "Online traders are having to go through costly third parties or overseas to obtain payment facilities. Banks are effectively holding up ecommerce which will mean Christmas Web trading will fall flat again this year," he said. One company that has suffered badly from this is Lastminute.com which, after a year of successful trading, has only now managed to persuade Barclays to provide card facilities on its Web site. Co-founder of Lastminute.com, Martha Lane-Fox, was highly critical of what she described as Barclay's "archaic" attitude. "They refused us on every level, even though we were better funded than most traditional start-ups. And this is the experience of many Web start-ups I've spoken to. The banks are still in the dark ages," she said. A spokesman from another bank, NatWest, said: "If a company has no business record or history then taking payments via the Web - in a worst-case scenario - could be a potential minefield." McGuire believes this isn't good enough anymore: "It's a valid argument, but only valid for so long. More than anything, the banks are missing out on a huge opportunity to seize revenue from this massive market."