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4.1.2 What is available? What is coming?

CommerceNet, introduced in March 1994, is an industry consortium organized into working groups. Its members comprise an intriguing mix of Silicon Valley semiconductor manufacturers, software companies, financial institutions, information providers, and businesses of varying size. The consortium is a hothouse for electronic commerce and a great source of information, especially for businesses. As of October 1994, CommerceNet had more than 50 members and 15 subscribers (small to midsize companies).

Cisco Systems and Premenos Corp. recently announced a secure electronic commerce experiment that should be readyin early 1995. The system uses RSA Data Security Inc.'s public-key cryptography.

CyberCash Inc. is a well-funded start-up combining the talents of Dan Lynch and William. Lynch converted the ARPAnet-the predecessor to the Internet-to TCP/IP back in 1983 and has continually demonstrated his abilities as an Internet visionary. Melton is the founder of Verifone, a company that made real-time credit-card verification a reality for retailers. Together they are working on a model for Internet commerce that will accept digital cash, and that already deals with credit cards, or debit cards. Expect to see CyberCash make its official debut in the spring of 1995.

DigiCash was founded by Dr. David Chaum. The company pioneered E-Cash, a software-only product that allows digital cash transfer over the Internet. E-Cash was developed for smart cards and electronic wallets-used in tollbridges, for example. DigiCash will supply the technology through other organizations, including Encyclopedia Britannica and NCSA (National Center for Supercomputing Applications), which will release the products under various cooperation and trial programs. The user software, which allows both paying and receiving payment, will be distributed free of charge. DigiCash will encrypt transactions and ensure anonymity.

First Virtual Holdings Inc. is attempting to become the first Internet merchant banking system. The company brings together the Hollywood business savvy of Lee Stein, First Virtual's president and CEO, and three of the leading Internet gurus: Dr. Marshall T. Rose, Dr. Nathaniel S. Borenstein, and Einar Stefferud.

Stein, an attorney and accountant, provides financial advisory services to the music and entertainment industries. First Virtual principal Rose, one of the Internet wunderkinds, has written the book (actually several of them) on SNMP (Simple Network Management Protocol) and network management. Borenstein, the chief scientist, is the primary author of the MIME (Multipurpose Internet Mail Extensions) protocol that allows transfer of anything digital over the Internet, including multimedia documents. Stefferud, probably the world's foremost expert on e-mail, has the role of chief visionary.

Introduced and online in October 1994, the First Virtual payment system allows any Internet user to initiate retail transactions via e-mail. The system aims to help maintain Internet culture by allowing buyers to evaluate information prior to committing to a purchase, which is a concept similar to shareware. No sensitive data is exchanged online in First Virtual's system. Users set up accounts by telephone or fax, and credit-card payments are processed off-line.

Registration fees are $2 for consumers and $10 for sellers. For each transaction, sellers pay a 29-cent fee plus two percent of the transaction price and a $1 processing fee each time a payment is made to their account. Initial First Virtual merchants include Internet Resources Group, Internet Multicasting Service, and an Internet newsgroup filtering service founded by David Farber, an Internet luminary. The Department of Commerce is also considering adopting the system to offset distribution costs of electronic documents.

The Internet Shopping Network was founded by its president, Randy Adams, who formerly was CEO and chairman of IIAT Inc., a publicly held international education and training organization. The company, which was recently acquired by the Home Shopping Network, is an online microcomputer software and hardware superstore available to anyone with direct access to the Internet. Internet Shopping Network distributes more than 20,000 computer software and hardware products, plus InfoWorld, a computer news weekly. Membership is free, and prospective members need only pre-register with an approved Visa or MasterCard.

Microsoft is also getting into the act. It recently announced a venture with Visa International that will enable Windows users to make secure credit-card purchases over the Internet using software co-developed by the two companies. The software will be based on RSA Data Security's encryption technology and Visa's VisaNet system will be used to authenticate payments. According to Chairman Bill Gates `Fall Comdex '94 speech, a `Wallet PC' that handles financial transactions and other consumer retail interactions may also be part of our future.

Netscape Communications Corp., which provides an enhanced commercial World-Wide Web browser, announced that it will support credit-card purchases via the Internet through credit-card processor First Data Corp. The Netscape system uses RSA's encryption technology to scramble sensitive data. Merchants can purchase Netsite server software for $5,000, and buyers can access the system through free client software.

NetCash is another secure Internet project underway. Developed at the Information Sciences Institute (ISI) of the University of Southern California, it is a model for electronic currency that can be anonymously transferred over an unsecure network without the use of firewalls. NetCash allows service providers and users to select payment mechanisms with varying degrees of anonymity.

Unlike most electronic cash systems in which only one financial institution generates and accepts its own digital cash, NetCash is designed to support the transfer of electronic cash between currency servers. At this time, NetCash has not yet been made commercially available.

Open Market is another secure Internet transactions venture. The system supports secure payment, real-time credit-card authorization, account statements, administrative interfaces for storefront management, and a customer feedback mechanism. The company offers `document fingerprinting, ` which automatically and uniquely numbers documents so that fraudulent distribution can be tracked.

Open Market's StoreBuilder kit ranges in price from $300 to $1,500 for setup and $50 to $300 in monthly fees, in addition to transaction fees and additional storage fees. Buyers can set up an account by sending credit-card info over the Net or by phone and fax. Open Market uses password and encryption schemes to secure its accounts.

Finally, Terisa Systems is a joint venture of EIT (Enterprise Integration Technologies) and RSA Data Security that is dedicated to producing a secure Mosaic product suite for Internet commercial transactions (see Section 4.2).

next up previous
Next: 4.1.3 Connecting financial systems Up: 4.1 The Rush Is Previous: 4.1.1 Introduction
Denis Arnaud