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4.1.4 No numbers, no crime

Credit cards are currently the most popular way to buy something on the Internet. This method is too dangerous to be practical, according to First Virtual's Rose and Borenstein.

``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 required.

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.

next up previous
Next: 4.1.5 Internet-savvy business Up: 4.1 The Rush Is Previous: 4.1.3 Connecting financial systems
Denis Arnaud