InformationWeek

CyberCash's Wallet Woes

CyberCash Inc., a provider of electronic payment software and services, reported that it lost almost $11 million in its second quarter, as the company's "electronic wallet" technology has failed to gain widespread acceptance.

CyberCash reported second-quarter revenue of $4.3 million, a 72% increase from the $2.5 million reported for the same period last year. Its net loss for the quarter rose to $10.9 million from $9.6 million in the same period last year.

CyberCash had said on July 14 that its net loss per share would be greater than analysts' expectations because of "changes in the rapidly evolving market for digital wallets."

CyberCash's Agile Wallet technology lets consumers make purchases through Internet vendors without having to type in their credit-card and shipping information at each site. The company distributes these "electronic wallets" to consumers for free and charges merchants for processing transactions made with them.

"At first, we thought that we needed to get merchants signed up first," says Maria Izurieta, CyberCash's VP of finance. "Now, the focus has shifted to distributing wallets to consumers first. That has pushed revenues out to future quarters."

While online retailing is growing rapidly, online sales still represent only about 1% of total retail sales in the United States.