TechCrunch posted information about a service called Noca that is getting into the online payment space. "While Noca aims to eventually facilitate online payments for purchases of all sizes, it begins with a focus on micro-payments." The service has launched two Facebook applications that offer micropayment services and operates in "beta" mode.

Noca is in such an early stage that it doesn't do a great job explaining how it works on its website - not even in the Terms of Service. Under "Management," it doesn't name the managers or founders: "The founding team is currently led by people from the financial services industry who have first hand experience about the pain merchants are suffering as a result of high processing costs for accepting credit cards online. We are rounding off the team with people from business as well as technology backgrounds and are always looking for the energetic and entrepreneurial kind if you wish to join us."

TechCrunch says Noca is a startup founded by former Visa employees and works by letting consumers enter their checking account information into the website instead of credit card numbers. This allows Noca to offer much cheaper payment-processing fees (http://www.techcrunch.com/2008/01/22/noca-targets-transaction-fees-with-new-online-payment-system/).

Noca sounds a bit like CheckFree's service for online auction users, which shut down in 2005. With CheckFree - which already had a strong base of users through its bill-pay service (which is still operating), both buyer and seller had to be enrolled in CheckFree's system. Buyer authorized payment to the seller, and funds were withdrawn from the buyer's checking account. While sellers had to pay 1.85% plus 30 cents per transaction, they liked it, because there was no way to retract a payment - sellers were guaranteed funds once they received a payment confirmation email.

If Noca is not going to use credit cards, but use bank transfers instead, it seems unlikely consumers would be able to issue a chargeback, one of the benefits of using credit cards. Online payment services like Google Checkout and eBay's PayPal don't offer consumer protection for purchases of digital content anyway, so this may not be an issue for micro-payments. But for purchases of physical items, one wonders what kind of consumer protection Noca could offer, even if, as TechCrunch says, Noca has long-term plans to "become much more like a credit card company itself, providing credit to users through direct partnerships with banks."

Another challenge to Noca: it seems unlikely eBay would allow sellers to accept it according to its Accepted Payments policy - the auction site still bans Google Checkout.

http://www.noca.com