Technology holds promise for real estate transactions
July 1, 1998
Inman News Features
Most items bought over the Internet are software, books, and CDs. For these items, a credit card is the quickest and easiest payment option.
But you can't put a down payment on a home with a credit card. For this and other big-ticket transactions, checks are the common payment parlance.
Say hello to the echeck, which could help kick-start automation in real estate transactions by having a secure form of payment more familiar to the industry.
In the latest Internet first, the first digitally-signed electronic check was delivered over the Web this week in what could mount a whole new wave in e-commerce.
The so-called echeck, for $32,000, was sent from the U.S. Treasury Department to GTE's Internetworking division for work done on a U.S. Air Force contract. The payment was the start of a year-long pilot program between the government and 50 contractors.
Echecks are created with accounting software programs and look like paper checks on a computer screen. Users fill out the normal fields -- as they would on a paper check -- affix a digital signature and send them in an encypted email message.
The receiver verifies the check, endorses it with the receiver's digital signature, and sends it to a bank where it is processed as a normal check.
The echeck program was initiated by the Financial Services Technology Consortium and a number of firms, including IBM, Sun Microsystems, GTE and several large banks. The cost to businesses for such technology would start at only a few hundred dollars.
For both consumers and businesses, trusting detailed financial information over a very public Internet is likely to remain an issue. But other benefits of the echeck abound -- billers don't have to wait for the postman for their payments, echecks clear in two days or less and take less time for banks to process, and the entire process cuts down on paper.
Moreover, it feels more like a check than other forms of electronic payment.
How might it work for consumers?
According to GTE, participating bank customers could be issued electronic checkbook kits, which include software and a smartcard device. The smartcard would be used to sign or endorse echecks using private keys that are stored only on the smartcard's microchip.
For more about the echeck, visit the echeck Web site at www.echeck.org. The site includes a survey in which visitors can tell developers what they think of the idea.
In the typical real estate transaction, the transfer of payment is only small part of a process that includes mounds of agreements and forms. Yet if successful, echecks could be one less puzzle piece to worry about |
