DUBLIN - Allied Irish Bank has licensed software that disguises card numbers for online transactions.

Dublin-based Orbiscom says some U.S. banks are also likely to start using its O-card software system soon.

Consumers will download the software from a participating bank's Web side. The software creates a substitute card number for each on-line transaction. That number is transmitted to the consumer's card-issuing bank, which authorizes the transaction.

"There has always been a reluctance among consumers to give their credit card details on the Internet, yet they want the benefits of shopping online," said David Roberts, Internet marketing manager at Allied Irish Bank in Dublin.

This "virtual credit card," he said, is as secure as a check.

A somewhat similar system was offered in the mid-1990s by a California company, First Virtual Holdings. Consumers had to apply for a First Virtual personal identification number, which was submitted to merchants in lieu of an actual card number. The system did not become popular - those who sought the security may have found the process too cumbersome - and First Virtual abandoned the strategy.

But "this one is going to work," Mr. Roberts said, in part because "the merchant does not have to do anything."

"We are providing customers with a valid credit card number, albeit a different one for each transaction."

Orbiscom says the O-card system has been endorsed by Visa International and MasterCard International for use over their international clearing and settlement systems.

"A significant number of top-10 credit card issuers in the United States are working with us," said Graham O'Donnell, Orbiscom's chief executive officer. "This technology will be seen in the United States before the holiday season this year."

Allied Irish Bank, which owns 5% of Orbiscom, has created a Web presence called transactonline for the system, which it says it will make available to all its Visa cardholders in July.

After the software is downloand to the consumer's computer, an "O" icon will appear on the screen when they make online purchases.

Clicking on the icon will bring up a digital representation of a credit card. The customer must then type a customer ID and password. At that point an "O-number" - a 16-digit alternative to the real credit-card account number - will be generated and appear on the customer's screen.

To complete the purchase the customer drags the virtual credit card onto the merchant site. Shipping and billing forms will be filled out automatically. Each transaction will have a separate, controlled number.

Allied Irish Bank has integrated the new technology into its credit card processing system, so the alternative number can be unraveled and linked to the cardholder's real Visa card number for authorization.

Once a transaction has been completed, the number is decommissioned for 180 days; then it can be regenerated for another one-time use.

From the merchant's point of view, the transaction takes place with a genuine credit card number issued by the bank for only one transaction.

Allied Irish Bank has 350,000 personal Visa cardholders and says it anticipates that at least 50,000 will sign up for the system in the first 12 months. The bank also says it hopes to attract new credit card customers by offering the system.

Kevin Kelly, managing director of Allied Irish Bank, said he expects transactonline to help expand the customer base of 24-hour online, its Internet banking service, by more than 300% this year to 100,000.

Consumers will not be charged for using the O-card system, which the Allied Irish is testing with its staff, Orbiscom employees, and a small group of customers.

Bank executives say the system may give Irish consumers more incentive to shop online. Only 59,000 did so last year.

"If consumers are encouraged to spend, then electronic commerce will take off," Mr. Roberts said.

Mr. O'Donnell, an electronics engineer, founded Orbiscom last June. Its managing director for Europe, David Brennan, was with Allied Irish for 23 years, most recently as head of its international card-acquiring business. He is among five former executives of Allied Irish Bank who have joined Orbiscom.

"The technology was conceived by nonbankers but brought to fruition by people from the banking industry," said Mr. Brennan.

"We understand how the payments system operates. Orbiscom has a simple principle - to keep the relationship between the customer and the bank, with no third party."

Orbiscom set up an office in Boston last month and will open one in California this quarter. The company expects to employ 35 people in the United States by June.

Last July it carried out user tests in Atlanta, Philadelphia, and New York.

"Everyone who saw the technology wanted to invest in us," said Mr. O' Donnell.

Privately held Orbiscom recently completed a second round of financing, which raised $15 million and brought the total valuation of the company to $200 million.


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