Opinion: Digital Cash Takes Step Toward Reality

From PC Week for November 13, 1995 by Bill Machrone

Some people are always looking for new ways to make money. Other people are always looking for new ways to spend money. They're running headlong into one another on the Internet. Most of the digital cash and electronic commerce schemes out there are still in their infancy, but many of them are predicated on making a transaction fee off the people who want to buy things in this new, electronic medium. Making money from people spending money is hardly a shocking proposition. But all the approaches that call themselves any kind of "cash" are stretching the definition. To the best of my knowledge, cash is the thing you can spend without having it costing you a cent, so to speak. The only way you'll see digital cash without transaction costs is if a powerful but paternalistic ruling body gets into the business. That doesn't mean if Microsoft builds it into the operating system, but rather if the government gets involved and makes some form of electronic money transfer legal tender, and therefore immune to fiscal encumbrances. This isn't remotely close to happening, so don't get your hopes up. Meanwhile, things are getting pretty interesting in the real world of digital-cash transactions. Digicash (www.digicash.com) has partnered with the Mark Twain Bank to offer online shoppers a debit card-like "E- cash" account that they can fill with real money and then use either in normal purchases or microtransactions from vendors who accept E-cash. You pay a combination of setup fees, monthly fees, and money-movement fees, but the overall goal is to make the transactions painless, transparent, and anonymous. The anonymity factor is a key component of real cash and a design requirement of Digicash. It's extremely unlikely that anyone could spoof the system and spend your money; yet you can re- create your E-cash on your own machine if you have a disk crash. Portland Software (www.portsoft.com) has also attacked the issue, putting itself in the position of vendors who want to sell things electronically. Its approach, called ZipLock, is suited to selling software products on the spot but is also suitable for published content, artistic images, and fonts. It approves your credit and goes through an unlocking/decrypting routine on the spot. The ZipLock transaction is much more like a normal credit-card transaction and in fact uses the communications infrastructure built by a major credit-card clearinghouse. In effect, it transforms your PC into a point-of-sale terminal, where all you have to do is enter your credit-card number. If you're ordering software or other electronically deliverable goods, they're transmitted and decrypted on the spot. Other merchandise is delivered via the usual direct-marketing vehicles. Fees are paid by the merchant, which means that the transaction cost is built into the price. Although E-cash and ZipLock are hardly the only two electronic-payment schemes out there, their differences are instructive. Each appears to have a significant, valid role in building consumer confidence in online commerce. Bill Machrone is vice president of technology for Ziff-Davis Publishing Co. He can be reached at wmachrone (MCI Mail) or 72241,15 (CompuServe). --****ATTENTION****--****ATTENTION****--****ATTENTION****--***ATTENTION*** Your e-mail reply to this message WILL be *automatically* ANONYMIZED. Please, report inappropriate use to abuse@anon.penet.fi For information (incl. non-anon reply) write to help@anon.penet.fi If you have any problems, address them to admin@anon.penet.fi