If DVNTF can make this a reality and dominate the market, this stock will go crazy!!!!! But first they have to release the software :-) It's make or break it time folks. We will either make lots of money or take a tax write off. What do you think it will be?
[The New York Times Business]
May 26, 1998
It's Time for Banks to Dive Into E-Commerce, a Pioneer
Says
By BJORN KASSOE ANDERSEN
EDEGAARD, Denmark -- Banks could rapidly transform
electronic commerce from a curiosity to a mass
phenomenon, but the banking industry doesn't understand
well enough how to sell technology, according to one of
the pioneers and top experts in the field.
"Within the next few years we'll see applications that
are so compelling for digital consumers and merchants
that eventually the light bulb will go off for the
banks," said Steve Mott, former senior vice president of
electronic commerce for MasterCard. While at MasterCard,
Mott oversaw the development of the so-called SET
standard, a proposed method for improving the security
of transactions over the Internet, favored by all major
credit card brands.
At the moment, Mott said,
most banks have a
wait-and-see strategy for the
age of digital commerce and
they remain reluctant to
follow initiatives taken by
international credit card
associations.
This may change soon because
of pressure from new
commercial interests
establishing themselves on
the Internet. "Until about a year ago, people from the
Internet community said: 'Why do we need banks?'" Mott
said in a telephone interview from his home in
Connecticut. "But now, many of the merchants, especially
those selling digital content like software, have come
back to the banks saying: 'OK, we need your help to
prevent fraud and expensive losses.'" With forged credit
card numbers being used for purchase of software on the
Internet, sellers of digital content have realized that
they need a security standard so high that banks will
take over the risk of losses.
According to Mott, who resigned from MasterCard in
February to become an e-commerce consultant, banks have
been slow to see a huge potential. "The marketplace is
showing that the banks can provide tangible value also
in cyberspace," he said. "The banks should be very happy
with that."
While most prophets of e-commerce predict enormous
growth rates within the next few years, Mott is much
more cautious. Because of consumer skepticism, he said,
payment over the Internet will remain a curiosity -- or
at best, a business-to-business province -- until banks
embrace cyberspace.
"The banks are the trusted brands that can guarantee
consumers and merchants a safe environment on the
Internet without the risk of fraud," Mott said. With the
SET standard, the banks get a system so secure that they
are willing to cover losses on the merchants' side. And
card holders can be assured that they don't have to
worry about abuse of their card numbers on the Internet.
"The conservative buyers and sellers -- which is most of
the mass market -- need this kind of assurance before
they accept payment over the Internet. If it is not
provided by the banks with the SET standard, it has to
be done by something very similar to it," Mott said.
As of now, most SET pilot programs are in Europe, but in
June Bank of America will offer the ability to perform
SET transactions to 700 United States merchants that
process about 500,000 Internet payments a year. Mott
predicted that, "if banks do it the right way," there
could be as many as 10,000 SET-enabled e-shops worldwide
by the end of 1998.
The Secure Electronic Transactions
standard was developed by Visa and
MasterCard to extend the high
security of traditional banking to
the Internet. SET uses complex
cryptography to transmit credit card
numbers over the Internet, and
digital signatures to ensure that
both customer and merchant are
authentic. The digital signatures are issued by banks
and used by customers and merchants for identification
in the virtual world. SET is considered safer for use
over the Internet than the SSL (Secure Sockets Layer)
protocol, which is an open, nonproprietary standard used
in most browsers today.
"The SSL standard has proved safe so far," Mott said.
"But if, for example, we have a major SSL security
problem that occurs in 1998, that will discourage the
vast market from doing online commerce for a very long
time."
Even as a strong believer in the SET standard, Mott
readily admitted that a lot of other solutions to
e-commerce safety will be developed. And he said that
banks will not be able to force through a top security
standard like SET if they aren't able to convince the
market of its advantages. A major problem is that SET,
as a completely new standard, needs its own software,
which currently is not built into Internet browsers.
Also, a consumer who installs SET can do so on one
computer only and then must do all Internet shopping
from that machine.
Mott said that a new, enhanced version of the widespread
SSL standard will improve security and could become
attractive because it will be distributed with all new
Internet browsers. For some merchants and consumers, the
enhanced SSL standard will provide sufficient security.
But, Mott maintained, SET will still be safer than SSL
-- and for high-risk vendors like the airline industry
and the sellers of digital content, it will be a very
appealing solution over the next three to five years, he
said. One of the U.S. pioneers, Air Travel Card, will
start using the SET solution this summer, selling
tickets from American Airlines, Lufthansa and Swiss Air.
The dilemma of consumers being tied to one SET-enabled
computer for all their shopping will be solved with
so-called "chipcards." When credit cards get a built-in
microchip, the digital signature will reside on the
credit card instead of on the hard disk of a computer.
Chipcards are part of the planned version 2.0 of the SET
standard, for which no release date has been scheduled
yet. But chipcards could also be combined with the
current SSL standard, which could solve most of the
security issues experts currently are worried about.
"If we can get the chipcard infrastructure in place, it
is inherently faster, easier, cheaper and more
efficient, not only for the consumer but also for the
merchants," Mott said.
Why, then, didn't the banks go for the chipcards in the
first place? According to Mott the answer is simple:
Banks have been talking about chipcards for a decade but
they haven't been selling them.
"They never developed a convincing business case," Mott
said. "And I don't think the banking industry really
understands how to sell technology. They are a little
afraid of it. That is true for what's happening with the
SET standard, also. What the banks need is some help and
some partners to show them the way."
--------------------------------------------------------
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* MasterCard's SET site
* Netscape's explanation of SSL
[The New York Times Business]
Copyright 1998 The New York Times Company |
