Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : WAVX Anyone? -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Radley who wrote (8447)	7/26/1999 6:46:00 PM
From: B Spears	Read Replies (1) \| Respond to of 11417

TD, I posted this a few days ago on RB and SI. Perhaps you missed it. Take a look at this and the other link which has some links to the CyberSource web page with an explanation of their technology. It appears to me that this is a server side solution with software security features. Not really what WAVE has in mind and according to all the data I have seen not nearly as secure but judge for yourself. Speaking as someone who has had his credit card number stolen and used all over the GD net I am ready for a hardware based solution. Cheers Bob Spears beta.siliconinvestor.com Taken from todays Red Herring. Perhaps WAVE should be talking to these guys and providing the client side solution. Note they are into secure digital delivery. Some to the techies will have more to say about this. Bob Spears VISA CHARGES AHEAD WITH ONLINE SPENDING By Georgie Raik-Allen Red Herring Online October 29, 1998 Credit card giant Visa announced this week it had made a "significant" equity investment in credit card screening startup CyberSource. The investment is part of Visa's better-late-than-never strategy to make a move into electronic commerce. As vice president of corporate development and alliances Tracy Wilk says, "Building a market for e-commerce helps build business for Visa." With the vast majority of Web shopping processed with credit cards, it is no wonder Visa wants to accelerate e-commerce by investing in startups that bypass the much-touted but little-adopted Secure Electronic Transaction (SET) protocol and offer alternatives today. Visa's previous policy was to wait until the SET protocol was widely adopted before jumping into the booming area of online shopping. According to a company statement, Visa and CyberSource will now work together to build products that "shield Web merchants and their banks from Internet credit card fraud." Both companies deny the investment signals a move away from SET, but analysts say they see it as a sign that adoption of the protocol has lost all momentum. "They are not admitting they are abandoning SET, but why else would they be investing in CyberSource?" asks David Restrepro from Jupiter Communications. "This is one more admission that SET is going nowhere." Mr. Restrepo notes. "It is cumbersome and difficult, and alternative solutions are fine. If it's already working, why try to fix it?" Peter Burris from the Meta Group agrees: "SET is too much bureaucracy, too much technology thrown at a something that is essentially a simple problem." Less fraud, more profit The beauty of CyberSource's technology, Mr. Restrepro says, is that it automates most of the screening that is now being done manually when customers make purchases on the Internet. The technology uses artificial intelligence, in conjunction with records of millions of successful and unsuccessful transactions, to develop a sophisticated profile of potentially fraudulent credit card transactions. It analyzes numerous transaction characteristics, such as time, network address, geographic location, and shipping address, to identify potential fraud. CyberSource claims it has reduced credit card fraud from the standard 10 percent to 1 percent for its 300 customers. As well as fraud screening, CyberSource offers a range of online business solutions such as secure online payment, export control, tax calculation, and secure digital delivery. The startup was one of the early players in the trend toward outsourcing services on the Web. It basically provides all the applications a Web merchant needs after the customer clicks the Buy button. While other startups offer some of those services, CyberSource claims it is the only company that offers all back-end applications in one package, so a customer does not need multiple vendors. It expects future competition will come from big transactional players. "Our challenge now is to run as fast as we can and build up a large enough customer base, so when the big companies jump into our space, we have enough brand to keep going forward." Cash ebb and flow Visa has also invested in companies such as Open Market that offer similar services to CyberSource but are aimed at highly technical and Web-savvy merchants. "All these investments allow us to get up and running," Mr. Wilk says, "It's in Visa's interest to get vendors online as soon as possible." Mr. Wilk says Visa was impressed with the track record of CyberSource's management team. Last December the startup, founded in 1994, spun off Beyond.com (then called Software.net) which then went public this summer. While technically a fifth round of funding, the equity investment is the first time CyberSource has received money in its new incarnation. CEO Bill McKiernan says the startup had been looking specifically for a strategic partner. "Quite frankly, it's easy for us to raise money now, but we were looking for a partner who can help us with sales and marketing, as well as jointly developing products." The startup's revenues for 1998 will reach $4 million. It was expecting to make an initial public offering this year, but has predictably decided to wait until 1999 when it hopes the markets will offer a little more stability. CyberSource and Visa say they still plan to adopt SET when (and if) it is adopted by Web merchants and banks. "We're still waiting, along with the rest of the industry, but we need a solution today," Mr. McKiernan says, "we want to get people online and Visa wants them to start spending money."