ICQ-money: what is it and who makes use of it?

November 19, 2007 Russian company Delta Key, Llc together with Hong Kong partner Matrix Capital International, Ltd had launched the new payment processor ICQ Money which basing on the experts' evaluation allows users to proceed the financial transactions using the IM-client. In accordance to the official press-release of Delta Key within first ten days the system was flooded with the transactions of 12 million rubles. As any other systems of e-wallet type ICQ Money would be interested for the wide spectrum of users such as independent exchangers, service providers, and, in general, to all current and potential electronic market players. Leaving aside all the exciting notes we will review the "newborn' basing on the comparative analyze with other similar type of service providers successfully operating in the cyberspace.

1. ICQ Money platform

Despite the use of ICQ in the name of the payment service Delta Key has rejected ICQ protocols due to several factors. The main reason was considered insecurity of the ICQ protocol as initially it wasn't designated to process any financial transactions and, therefore, doesn't have to provide the users with multilevel authorization process. Secondly, the ICQ protocol doesn't support the SSL-connection. Taking in view this matter, the developers of the ICQ Money decided to integrate SSL-connection commonly used for all payment service processors. Thirdly, ICQ protocol can be changed by the developers. Let us note, that once logged-in on the official site of ICQ developers: http://www.deltakey.com/ you wouldn't be able to find any remarks regarding the appearance of the ICQ Money processor. It makes you wonder if the ICQ developers are actually aware of the e-wallet with the ICQ interface. So Russian Delta Key has decided to integrate the DKCP-protocol that allows the system to run SSL-connection insuring the users that information is transferred neither to the ICQ servers nor to ICQ protocols. The other fascinating thing is that ICQ Money seems to remain locked within the former Soviet Union countries (Russia, Ukraine and Moldova), giving its partner the dominance over the rest of the territory. Event the interface is offered only on Russian language that makes it completely useless for the users outside of Russia or for non-Russian speaking segment of users. It looks like that the developers of the ICQ money limited the coverage of their system being afraid to compete with such online monsters as PayPal, iKobo, MoneyBookers and others. Meantime, we can't deny the innovative side of the ICQ Money as the tentative to combine the IM and payment processing platform that allows the users not only to freely share the information, but also to transfer money, exchange it on the available currencies and several types of digital currency, pay for he online purchases and issue the e-checks.

2. ICQ Money currency

As any other providers of similar services the developers of ICQ Money came up with idea of integration of specific currency that would be able to provide the transnational and borderless features complied with any digital currency. However, in difference to webmoney, e-coins, e-cash,  ICQ Money uses Units as internal currency (UNI) linked to rubles, national currency of Russian Federation: 1UNI =RUR10. The CEO of DeltaKey Andrey Novikov had explained decision of tighten internal currency of ICQ Money to rubles by the patriotism and certain addiction to the strengthening Russian national currency in comparison to weaken dollar and unfavorable Euro. We would partly agree with this reasonable choice basing on fact that the system itself is limited by the post Soviet space and, therefore, is targeting the users inside of the framed circle. In addition, the experience clearly showed that once the Russian-based company changes the calculation of the payments from dollar to euro it usually looses the revenues and the volume of general turnover.

3. Types of the accounts

The developers have offered their service's users three main types of accounts: "Basic"(similar to Personal account in PayPal, "Professional" (analogue to Web Payment Pro in PayPal) and "Investor" (prototype of PayPal Business account). Below we will retrieve the basic features of each account together with applied fees' tables.

Basic  

We have mentioned that Basic account in ICQ Money has similar features as PayPal Personal account. It is mainly designated to one-time transactions such as rare online purchases. In difference to PayPal, the fees are applied on sender not on receiver. For each processed transactions the sender would be charged with 0.75% but not less than RUR 1.00, comparing to 1% charged by Moneybookers for the internal accounts' transactions and 1.90% for the international (Moneybookers operates in 35 countries on 12 languages); in the ICQ Money while sending assets to external accounts the sender will pay 2.6% of the amount sent but not less than 50UNI in the currency of the country of receiver. There several ways of funding and withdrawal on the Basic account, such as via express payment terminal, exchangers, plastic or e-check. Be ready to the certain fees that might apply once you wish to withdraw the money in currency other that rubles. You may want to check the exchangers' rates to determine if you still want to exchange the units. There's no mentioning about the exact charges to be applied in this case as similar to e-gold it's the user's responsibility to find the most reliable exchanger with the lowest exchange fees' rate. Let's say on the web site of the Moneybookers.com the exchange rate is determined basing on daily reference rate with 1.75% added to Internet bank rate, against the determination of exchange rate based on sole discretion of company including 2.75% withheld for providing conversion services. There are several granted options available: to sign into the system, to open and to fund account, to transfer assets between you linked accounts. While shopping online the system allows sellers to determine who would cover the service charges applied for the processed transaction - usually it is equal to 0.75% that might be charged from either buyer either seller. Once the users will decide to buy the e-check to pay offline or to withdraw the money from the account, ICQ money will withhold 0.6% of e-check value. Similar to PayPal - ICQ Money offers two choices of plastic to withdraw the money via ATM "Matrix Visa Electron": 1-year for 50$ and 2-year - for $60.

Professional

Professional - analogue of PayPal "Website Payment Pro" and is designated for those who plan to receive and send the money on the day-to-day basis. It is popular among the e-retails, exchangers or companies that issue a lot of e-cheks as the mean of payment within their network; it might be also a good solution for the companies that are considered to be small or mid-size business. "Professional" accountholders are released from paying any fees for the internal transactions, however, there's the obligatory maintenance fee as of 45UNI per month, automatically credited every 1^st day of each month. Compare to the $30 maintenance fee charged by PayPal plus from 2.2% to 2.9% + $0.30, depending on amount of money transferred (for US located businesses) and up to 3.9% + $0.30 for the overseas companies. As to transactions to the external accounts the ICQ Money user will pay 1% of the sent amount but not less than 50UNI in the currency of the country of the receiver.

Investor

Investor account was developed for the owners of the big online stores with developed distribution e-net and for the service providers who work via merchant systems. The Professional account holder is released from the payment of any fees while working with merchants and is offered a discounted rate for the internal transactions processing in case the accountholder is registered as service provider, owner of the online store or as the cardholder of VIP Card "Delta Key Gift Card". The cost of such card is 4500UNI, however, with the development of the system the users may face the increase of the nominative value of the Gift card.  As to the transfers to the external accounts the accountholder of Professional will be charged with 1% of the amount sent but not less than 50UNI in the currency of the country of recipient.

The users are free to choose the type of the account, however, once you have registered for Professional you will have to wait until the end of the monthly subscription. The ICQ Money system had abolished the commission for paying the services of certain providers-partners linked to ICQ Money system, among them we would mention CyberPlant, E-port, Delta Telecom, Delta key and others. The payment to these service providers may be fulfilled from the "express payment".

4. Chargeback policy

Similar to Moneybookers that named themselves as "non-reversible hard currency" ICQ Money stated that all processed transactions are final with zero chargeback. Moreover, the company declared (similar to undeclared policy of E-gold corporation) that it would not provide anyone with any personal or financial information related to any of the account holders but following the effective court decision or warrant issued by the respective authorities. Moreover, none of the processed transactions maybe void by the system's initiative. The zero chargeback position of ICQ Money was explained by fact that they represent nothing more than a simple payment system that is designated on the secure, reliable and fast transactions' processing. Basing on this policy declared on the web site November 29, 2007 the ICQ Money has non intention to froze any account or to share any provided during the registration or operation information in reference to any particular accountholder except by the request of the respective authorities or on demand of the dealers-system's partners claiming unauthorized funds withdrawal.

5. Registration. Security tips 

Any user of the ICQ Money has to register to be able to open the account, to load and to withdraw the money, to exchange it or to pay for online purchases. As any payment processors ICQ Money would request the provision of the personal information as passport, residence address, and password to be able to enter into the system; you will be required to create payment password that would authorize the transaction's processing (similar to passphrase in e-gold.com).  The provision of the personal information such as passport and e-mail details creates the multi-level authentication process. The customer who will receive the money transferred to his name has one week to register, to open the account and to receive the money. During this week the money is locked on the system's account. Provided the receiver didn't registered within 7 days from the date of money transfer, money would be returned to the sender with the notification that the receiver was not found. The temporal lock of such sum generated from let's say dozen accounts is a good investing tool for the system itself, as it allows to use the stored money for its own purposes without paying any interests to the senders of assets. Plus the storage of big amount of money on one account will be again an attractive target to the hackers. Despite the common security tips used by the majority of payment processors ICQ Money didn't generate the obligatory acceptance of the user's agreement (buyers'/sellers' policies in the PayPal), it doesn't generate the random number, well-known as CAPTCHA, that allows to distinguish the user as a human being not as a computer. It didn't integrate the randomly generated number as tocken in Moneybookers - that provides the users with additional type of security and decrease the chances to hack the system.  The other surprising fact from the security point of view is that the initially generated login is hard to be memorized but the user is able to store it in DIM (Delta Key Instant messenger) that is the most attractive and the easiest target for the hackers, even for the beginners. The ICQ Money developers are ensuring their users that the limits of access set via IP and the implementation of the one-time generated keys will be useful tips, however, it is not integrated into the system and, as a result, is not considered as  obligatory. The easiest thing is to declare that ICQ number is lost or stolen and within a short period of time to transfer all assets to new UIN or JID. Again, it might work during the testing period, however, we believe that it would prevent the company from gaining the critical mass, as uncontrolled change of the ICQ and UIN numbers and new processed registration followed by transfer of assets will create a mess in the system and will  allow to develop the threaten environment.

           6. E-Invoice

Similar to PayPal ICQ Money allows the users to generate the e-invoices and send them via e-mail with the request of payment remittance.  However, due to undeveloped notification system the receiver doesn't see the upcoming e-invoices, in other words, the submitted e-invoice would remain as unpaid for a long time. In addition, the sender generating the e-invoice doesn't receive any information if the issued invoice was delivered to payee or not. Similar to PayPal - ICQ Money allows to see the history of all processed transactions that might be a useful tip to understand the balance of inflow ant outflow, as well as the amount of fees and commissions paid to the payment processor.

Instead of conclusion we would like to underline that the initiative of the ICQ developers can be considered as innovative from the point of view of the combination of the IM and payment processing platform. The easy registration process and variety of the funding ways such as direct transfer form the bank account, from the credit or debit card without any additional charges applied, via e-check or express-payment terminal, and, finally, via webmoney are considered as obvious benefits. However, the load of funds from the bank account is available only for the residence of Ukraine and Russia.

At the same time the system itself has the number of unsolved issues that might slow the increase of the critical mass of users. First of all, the framing of system's coverage by the territories of Russia, Moldova and Ukraine significantly limits the flow of potential receivable funds. Secondly, the link to Russian local currency imposes the additional charges for the currency conversion to transfer the money to the external accounts. Thirdly, it doesn't correspond with any other recognized world processing systems that would keep it as isolated service provider.

As to security aspects, we believe that the transfers of the money to the users who did not yet in the system and locking for one week the assets on the system's account can be regarded as unsecured and abusive as the processor doesn't pay any interest for using the sender's money during this week. The non-reversible transactions and policy of unfrozen accounts may create the same situation e-gold corporation faced coupe years ago, when it was accused in processing the payment for the adult industry, including the payment for child pornography, drugs, terrorist and fraudulent activities. By stating the unfrozen policy the company formally states that it would not investigate the source of the funds uploaded into the accounts neither the purposes (services or goods) of the payments processed. In other words, it is quite illogical to come with innovative idea and to tread on e-corns.

Natalia, reporter of Ecommerce Journal