MYSTERIES OF THE PYRAMIDS

To assist those who may be confused by the proliferation of new and competing electronic payment media - E-cash, Netchex, Mondex, MasterCard and Visa initiatives, various micropayment ideas for the Internet - Cybercash Inc. chairman William Melton suggests the image of the pyramid. Pondering the "world without geography" that is the Internet, Mr. Melton said numerous payment structures are likely to evolve and assume the monetary roles historically assigned to governments. Each will be a "pyramid of trust," topped by a powerful entity in a position to validate the commercial activity within its realm. MasterCard and Visa are forming two of those pyramids, Mr. Melton said at the National Automated Clearing House Association's Payments '96 conference. "Every bank that is a member of those associations will be able to have their identity proved by reference to the pyramid from anywhere in the world. "Will there be other pyramids? Certainly," Mr. Melton went on. "If we are looking for plurality in this world, then financial institutions must think about the power of these pyramids and make sure they are a member of as many as they think they ought to be in." But he suggested individual banks' identities will be critical. A bank's brand name on electronic money and its associated digital certificates "means it's O.K., trust me," Mr. Melton said. "If a financial institution cannot brand a software or hardware 'wallet,' then it has lost a channel of continued credibility."