December, 1997

Exploring Digital Cash

Micropayment Products

While many of the "extension" systems described previously promise the ability to handle micropayments, they have often done little more than added this capability to their claims, or are unclear about when these capabilities will be available. In contrast, there are two products being designed specifically to facilitate micropayments and their unusual requirements, and which do not claim to be designed for the rest of the electronic-financial spectrum of future services.

CyberCents: Outreach Communications has created a demo of CyberCents, which is designed as a micropayment system. CyberCents would be purchased (generally by credit card) in blocks of 5 to 10 dollars, so the transaction costs of credit are only incurred once. It is designed for payments as small as 1 cent, though it does seem to have some possibility for larger transactions of several dollars each. Outreach Communications seems to be very merchant-oriented in their line of products, and claims a background as "...a leading supplier of Internet payments systems with a full line of proven Internet Commerce software solutions and busniess services."

Millicent: This is from Digital, and one of the most interesting products being developed to handle micropayments. Digital has a background of making networking equipment and software (the old VAX/VMS systems) and is currently shifting customers over to networks using the "Wintel" model, though with DEC Alpha Servers and/or workstations. Their approach to micropayments is to not worry about the issues that plague larger transactions ranges, and to issue a moderately-low security scrip to enable microcommerce in real time. Digital will provide the software to brokers, who will then issue the scrip to consumers, though only in small amounts. The scrip is effectively a local currency, specific to each broker's server, though it will be authenticated by the broker. The design range of transactions is from one cent to two dollars, and the product is under development at this time. (As with other companies, it is likely that Digital would like to offer some part of the functionality needed to participate in emerging electronic markets to their customers. But this system is different from most other computer companies's in that it's just one component of electronic commerce, not a system designed to use other components.)

U.C. Berkeley's Haas School of Business is offering chapters and drafts of current works on the internet, using Millicent as the payment mechanism. This site is available at http://host.millicent.digital.com:3190/~cmit/entry.html.

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