On-Line Banking: Top Austrian, Norwegian Banks to Sign Up with Digicash

Digicash Inc. has licensed its E-cash on-line payment system to the largest banks in Austria and Norway.

Bank Austria and Den Norske Bank said they will enable customers to make purchases over the Internet-such as catalogue items, software, and news articles-using the digital form of money that resides on a personal computer's hard drive.

Digicash, the Amsterdam-based company that developed the technology, had previously licensed E-cash to Deutsche Bank in Germany, Advance Bank in Australia, Merita Bank of Finland, and the Swedish postal service.

The company's U.S. profile has been lower than that of at least one competitor, Cybercash Inc., which offers an alternative called cybercoin and a different technical approach to Internet payments.

The only U.S. licensee of E-cash is Mark Twain Bancshares of St. Louis, which has been conducting a small pilot with merchants and consumers.

Bank Austria and Den Norske Bank are planning to use E-cash as a foundation for electronic commerce initiatives. Consumers will be able to install free software, download digital coins into an E-cash account, and spend the money at the Web sites of participating merchants.

Den Norske Bank already has signed an on-line florist, a music retailer, and a financial newspaper for its pilot.

Bank Austria-which began offering Internet account access in early 1995, putting it in the forefront of banks on the World Wide Web-plans to deploy E-cash "to fill the gap between banking and the credit card business," said Robert Macho, senior adviser on electronic banking.

"The current existence of smart card and electronic purse services in Austria proves that the market is ready for the issue of digital money for the Internet," the bank official said.

Two weeks ago, Digicash announced it had licensed E-cash to its first company in Japan. Nomura Research Institute will use the technology in an intranet that will allow employees, departments, and associated companies to buy and sell goods and services in Japanese yen.

A Nomura Research executive said the company was drawn to Digicash's system because it did not rely on paper or smart cards.

"A great deal of discussion of electronic money in Japan has been focused on smart card-based ones, such as Mondex," said Teruyasu Murakami, director of the Nomura advanced social systems division. "However, we believe network-based E-cash is equally important for the accelerated development of the cyberspace economy in Japan."

David Chaum, the founder of Digicash and developer of its technology, said the recent partnerships further his goal of making E-cash "a widely adopted industry standard" for Internet payments.

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