``It's very easy to write a program that looks for a sequence of
numbers beginning with a known credit-card prefix,'' Rose said. That is
why First Virtual never requires a potential information merchant or
consumer to send credit-card or checking-account numbers over the
Internet. Instead, First Virtual customers enter these numbers using an
automated phone system to set up a First Virtual account.
The Internet Shopping Network also keeps credit-card information off
the Net. Members enter their credit-card numbers using phone or fax
when they first establish an account. Open Market's system also
includes this option.
CyberCash deals with the problem using encryption. Its customers will
have a public key and a private key and must use both to complete a
transaction. The company will also use authentication and digital
signatures for added security.
Debit cards can be used for Internet-based financial transactions today
because the technology is in wide use among banks and retail points of
purchase. It is likely that the percentage of businesses accepting
debit cards for Internet purchases will be higher than the existing
number in the off-line marketplace because no special hardware is
At the October World-Wide Web conference in Geneva, DigiCash CEO Chaum
demonstrated how anyone with a personal computer could transfer
DigiCash's E-Cash to any other workstation via e-mail on the Internet.
The E-Cash system was shown integrated with Mosaic.
Digital cash is the binary equivalent to currency. It differs from
credit and debit cards because it enables anonymous transactions.
``How much money are you willing to lose?'' asked CyberCash's Lynch.
``You don't, and I don't, walk around with $10,000 in your wallet.
Usually people carry around what they are willing to lose. The same
will be true for digital cash.''
According to Chaum, DigiCash has a solution to the problem. ``E-Cash is as secure as any government network because it employs the same underlying security mechanisms,'' he said. E-Cash ensures the high security required for electronic networks exclusively using `blind signature' technology, an innovation in public-key cryptography.