INTERVIEW-CyberCash sees industry consolidation
Reuters Story - August 26, 1998 05:41
By Narayanan Madhavan
NEW DELHI, Aug 26 (Reuters) - The Internet electronic payment industry is heading for consolidation which could see more
mergers, Bill Melton, president and chief executive officer (CEO) of CyberCash Inc , said on Wednesday.
"There is a high possibility of that happening," Melton told Reuters in an interview on the margins of India Internet World, an
international conference in New Delhi.
"We would intend to be the consolidator and not the consolidatee," Melton said.
Earlier this year, CyberCash acquired ICVerify Inc in a merger worth $57 million, a key step forward in an industry which is
now small but seen as holding high potential as Internet fuels easier transactions through electronic wallets of the kind Melton
has championed.
ICVerify competes with Hewlett-Packard Company's Verifone unit, the world's dominant supplier of electronic payment
systems to store retailers. Melton was a founder of Verifone before it was bought by Hewlett-Packard.
Easy-to-carry electronic "wallets," substituting for cash and credit cards, involve secure transactions, digital signatures and
identification in an industry that merges the principles of high finance with high technology to achieve consumer convenience.
Melton said CyberCash, after a bad experience in early electronic wallets, last week launched InstaBuy, a "one-click" product
aimed at boosting buying ease.
"We spent tens of millions of dollars learning what the market wants and what the market doesn't want," he said.
"Among other things, the market does not want a fat wallet or a large client piece software," Melton said.
InstaBuy involves a facility in which the buyer does not have to fill in personal details. "It is convenient, it is fast, it provides
security," Melton said, pointing out that the product was issued by banks, offering safety to consumers.
"We feel there is a 20 to 30 percent dropout when consumers have to fill in additional forms," Melton said.
"Christmas 1998 I think is going to be the first year of serious consumer shopping on the Internet, and I would anticipate that
the InstaBuy wallet would become very popular during that period," he added.
Melton said he was "comfortable" with revenue forecasts of $15-20 million in 1998.
"Analysts who follow our company are projecting that we will have growth in the neighbourhood of 300 percent or more. So
they are projecting sales of 15 to 20 million dollars," Melton said.
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