UC Berkeley [School of Information Management and Systems]

[Introduction] [Consumer Issues] [Business Issues] [Financial Issues] [Governmental Issues] [Digital Cash Products:] [Digital Cash] [Digital Wallets] [Micropayment Systems] [Niche Products] [Questions Raised] [References]
[Info Sys 204]

December, 1997

Exploring Digital Cash

Wallets and Multiple Payment Products.


The products being developed by companies already involved in payment verifcation for credit-ATM, and software/hardware development are generally realistic products. Many of these systems are in early trials phases now, and they can be characterized as doing two things. These products extend the capabilities of exisiting authentication networks to handle more payment options (including Digital Cash, and most of them now promise, micropayments). And they also complement the exisitng product lines or operating systems of software companies, and are aimed at keeping market share both for the existing OS platforms (such as MS Windows/NT and Sun's Java) and extending these products into new fields, to capture market share in those fields.

VeriFone: VeriFone is the company that's well known for ATM/Credit verfication systems. (Watch the next time your card is "swiped" through a reader in a store. Chances are that it's a VeriFone.) Beyond the ATM/Credit model, VeriFone is working with Hewlett-Packard to create a "V Wallet" sometime during 1997. The V Wallet is designed to store shipping and billing information, credit card numbers, digital credentials (certificates and key pairs) and can incorporate other Internet payment instructions as they are developed. The V Wallet will be SET compliant (see CyberCash) so handling electronic cash should be possible. There are products sold to merchants as well as the V Wallet for consumer use, and this product can be viewed as the next generation of the existing VeriFone system, with banks acting as the acquirer/processor of transactions, and merchants purchasing software to conduct transactions. The interface being developed for the V Wallet by HP is called the Paypage API. While it is definitely an evolutionary product, if VeriFone/HP successfully incorporate new digital cash capabilities created by other companies, and make the use of these available to consumers, there is the advantage that such new products will be universally usable, rather than depending on a dedicated network of merchants that can handle an exotic payment product.

IBM Commerce Point: This product was announced by IBM on Sept. 9, 1997, and is available now. The merchant-server part is called NetCommerce, and the wallet for consumers is being designed as a browser plug-in. The whole scheme uses the existing "cc processing systems" from IBM, and feature "Domino-Web compatability." IBM plans to utilize Cryptolope (a Java-based security object) to sell applet-based services over the web. This would be exemplified by software that, once purchased, is able to upgrade itself. The payment approval routine is, as with VeriFone, built on existing credit card routines, so if electronic cash is a part of the V Wallet, and software sales are routine, this again is an evolutionary product that has exotic implications.

GlobeID Payment: GlobeIDís technology offers a wide variety of payment methods, such as electronic purse, virtual electronic purse, micro-payments, magnetic stripe or chip based bank cards. The technology also supports standard payment protocols such as SET and C-SET as well as standard security protocols such as SSL, and therefore establishes a basis for rapid international acceptance and deployment. Merchants license the virtual cash register from Globe ID, and users get the Wallet Interface Module (WIM) for free to use on their computers. The WIM is an application/interface that can govern a user's credit cards, digital cash and stored value accounts, though the information on these accounts (and any stored value) exist only on the Globe ID Operator's server. Users can make purchases over the Internet, selecting from their WIM which payment option they desire. Their information is verifed by a merchant with the Operator, and any credit card numbers or other information remain invisible to the merchant. The GlobeID technology is already operational and integrated with major merchant servers, such as Microsoft Commerce Server, Intershop, Icat and Ilog. Via its licensees, and in particular KLELine (Compagnie Bancaire), more than 30,000 consumers today have access to the GlobeID payment system, and hundreds of merchant kits have been distributed in Europe, Latin America and the Middle East.

Java Wallet: Sun Microsystems is developing a Java applet that "...will organize all of a user's credit cards, electronic checks and electronic cash, as well as organizing receipts, coupons and other electronic identification." It is designed to be a component of web browsers, and to provide both database and cryptographic technologies. By leveraging the Java language's capabilities to download code, the Java Wallet will be able to include new payment and receipt mechanisms. This system is claimed to have micropayment abilities, with a range of 5 cents to 2000 dollars being given. It is unclear whether this product is being developed for browsers other than Sun's own JDK, but an alpha version (requiring JDK 1.1) is available online.

NetBill and CyberCash: NetBill was developed at Carnegie-Mellon University, and is being licensed to CyberCash for worldwide use. CyberCash is similar in scope to Globe ID Payment, in adding the new functionality of online commerce and multiple payment options to the existing bank/credit system. The consumer receives a wallet, issued by a financial institution, and the wallet governs the use of credit cards, currency and checks. Wallets are now available as a browser plug-in from Netscape, Compuserve and Checkfree. They have the goal of creating a CyberCoin system as a component of CyberCash, to handle micropayments and delivery of information. There are products linked to CyberCash to help create web-based Points of Sale, from consumer payment to catalog creation to billing services.

Other Related Services.

MSFDC: Microsoft and First Data Corp. "launched" MSFDC in June, 1997. It's built to allow consumers to pay their bills online, using existing home banking products or new web sites. They want to have a stake in "...next generation electronic payment and remittance capabilities." This is, however, a service and not a digital cash system.

Checkfree: This is a product for paying bills online, using existing bank accounts. Like MSFDC it is an online bill presentment and payment system not any form of electronic money.


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