I have never seen a payment services evolve as quickly as PayPal. From my experience, it takes years to grow a payment service. However, from a technical point of view, the PayPal phenomenon was nothing special. Even I could have sourced the technology components they needed as it was available in the marketplace.

PayPal's success was tied closely to the success of online auctions, where a need for a speedy payment service was required. But with many new start-ups, especially during the Internet boom, the key was to develop its own application using standard messaging and database applications.

Reflecting on PayPal's success, I wonder if we will ever see another similar phenomenon in the payment industry again. I think the answer is yes, but it depends on financial institutions enabling new companies to take advantage of new areas of demand - areas banks may not initially see interest or profit potential.

Bankers are often skeptical about new payment technologies and services, especially if they don't see how new opportunities may make them more money. Bankers are also very protective of their current card business. As a result, any new low-value payment services have to be valuable and usable via-a-vis their easy-to-use card applications.

So what could be the next area from which new payment services will emerge? I started digging for the answer by contacting a few friends in the industry. After a while, it became apparent that in the U.S., the un-banked consumer segment was a very large group and was going to play a very influential role in the emergence of new e-payment services.

A large majority of workers belongs to the unbanked segment. These consumers do not have a bank account and get paid by cash or cheque. To cash their cheques, they have to use a money-mart or similar service. The money-mart takes a fee, reducing the cash-in-hand to the worker. Many of these workers are immigrants sending money back to their families by using wire transfer services, such as Western Union. By the time the cheque is cashed and funds are wired, they will have paid middlemen high service fees.

An ideal application for this market segment would be a stored-value service linking the worker, employer and merchant. The service would encompass a server-side wallet, which the worker can access with a card at an ATM or directly at a merchant location. By leveraging current technologies, the new service can cost less than current cheque cashing and wire remittances. By issuing a card to families expecting money in other countries, these families can access the funds instantly from their location.

Another area that peaked my interest was the direct debit segment, especially now that technology exists to conduct direct debit on the Internet. I think the credit card has been dominant far too long, and the prospect of direct debit over the Internet - the ability to pull funds from a customer's bank account and push them to a merchant's account - is compelling. I came across a company offering direct debit services. UseMyBank (www.usemybank.com) has developed a service enabling consumers to pay for online services through any bank that can be accessed on the Internet and leverages the existing online system's functions and capabilities within the client?s bank in a real-time environment.

Using the system is as easy as signing-on and selecting a payment amount. If the seller has already provided the amount, it automatically appears, and the consumer is asked to confirm the amount. UseMyBank then sends the payment to the bank, which replies with an electronic confirmation that the funds are available. Payments are shown on the account as made to UseMyBank. The system currently supports all major Canadian banks, and the company hopes to add major U.S. and European banks by the second quarter of this year.

The main element of the UseMyBank.com system is the Automated Online Payment Interface, which provides consumers the ability to make payments at their own financial institution's supported Internet site.

"The trick is facilitating real-time verification of the payment, which no one else can do," says Joseph Iuso, president of UseMyBank. "Competitors who have tried similar models have fallen flat on their face because they can?t provide real-time verification."

The Automated Clearing and Settlement system for merchants and affiliates accommodates wire transfers, cheques and several other payment methods, as long as the account is accessible over the Internet.

"In Canada, over seven million online accounts are eligible to pay the merchant or seller with zero charge backs in real-time for less than 1 percent," continues Iuso.

Currently, UseMyBank has signed up online entertainment sites and travel sites.

I found UseMyBank very easy to use, but I wonder what the banks have to say about how the service utilizes banks' online banking services. The critical path for UseMyBank will include signing up merchants to use its system as well as positioning and marketing its brand. The critical path would also include the acceptance of their brand, which requires a serious budget. UseMyBank should give PayPal a call to exchange notes.

Maybe we will see another great success in the payment industry. UseMyBank has a unique proposition, and only time will tell if it succeeds.