InformationWeek
Defining The Business Value Of Technology
May 31, 1999
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Newer wallets are intended to make things easier. In March, Microsoft previewed Passport, software that includes universal sign-in, registration, and a digital wallet based on technology from its acquisition last year of Firefly Network Inc.
Companies such as Amazon.com have worked around the hassle of wallets and entering credit-card numbers each time a purchase is made by creating their own one-click shopping capability, Wilson says. That's nifty, but it's too complicated for many merchants to set up that capability--and banks and consumers alike worry about retailers storing names, billing addresses, and credit-card numbers on their servers, Wilson says.
CyberCash's solution is its Instabuy service, introduced in February, which provides consumers with one-click shopping but keeps the credit-card and billing information stored centrally at a First USA server, so users don't have to download client software onto their PCs. After a person uses the service once, he simply enters a password and his credit-card information is sent to the merchant.
So far, CyberCash has only one customer for Instabuy. Impulse Buy Network, an online clearinghouse for more than 100 merchants, uses the service to sell products from companies such as Barnes & Noble, Eddie Bauer, and Egghead.com. Impulse Buy Network was acquired by Internet technology developer Inktomi Corp. in April.
Qpass is also taking a stab at the micropayment model. In March, the company launched its Content Transaction Network, a back-end system that supports the sale of content over the Internet. The company uses something called an "accumulated balance" to record charges for content, which it tallies into a single credit-card transaction at a particular time or when the balance reaches a specific level. Web sites that use the Qpass system offer customers a form to complete, which requires credit-card information.
Qpass' first round of customers include Morningstar Inc., a financial-information service, and The Wall Street Journal. The Journal has already had success charging for monthly and annual subscriptions on its site, but saw opportunities to sell content to buyers looking for specific information or with short-term needs. Since March, it's given visitors the option of paying for a one-day subscription to its online edition. The fee is 75 cents. "We always thought there was a market for daily or smaller-time-frame subscriptions and we wanted to be able to reach them," says Kate Downey, director of marketing results for The Wall Street Journal Interactive Edition.
The Journal considered other micropayment options but decided against them because they weren't easy enough. "Micropayment systems that required people put money into an account and then deduct from that really put the onus on the customer to do the work, and we didn't think that was too user-friendly," Downey says.
Trivnet and iPin engage the Internet service provider to assist in billing customers. The services work in similar ways. The ISP tracks a user's charges and then bills the customer at month's end. Trivnet customer Tucows, the software-distribution site, has relationships with multiple ISPs; iPin has 75 merchants and several ISPs involved in trials.
Check, Please
E-billing is another concept that's becoming a reality on the Web as banks and merchants give consumers and businesses new options for settling accounts.
Intell-A-Check's Intell-A-Check 6.0 software, introduced in April, lets merchants for the first time send information, after it has been checked against Intell-A-Check's own database, to a third party that does a credit check. The service issues an approval code and the merchant creates an automated clearinghouse file--a data file used by banks for moving money from one account to another--using the Intell-A-Check software, and E-mails it to the bank to request payment from the consumer's account. Intell-A-Check officials say the payment guarantee is of interest to merchants such as NetGrocer, which may not know their customers and want to verify the funds before shipping goods the day of purchase.
Kevin Fahey, national sales director of Intell-A-Check, says the approach can cost merchants less than the 2% to 4% fee they now pay to process credit-card transactions. Intell-A-Check charges merchants a fixed fee of 15 cents to $1 per transaction based on transaction volume, while verification services such as Telecheck and Equifax charge 2% to 2.5% on top of that to ensure payments don't bounce. "Companies are looking to offer their customers convenient payment options--a choice between credit cards and checks," Fahey says.
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Illustration by Hank Onsuna
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