Digital Signature Trust Co., an affiliate of Zions Bancorp., said it has bought TradeWave, a dominant provider of certificate authority services to electric utilities.
DST supplies trusted third-party services, validating the identities of anonymous trading partners on the Internet.
TradeWave of Austin, Tex., is the dominant technology vendor to Open Access Same Time Information System, or Oasis, an Internet-based network that lets power companies buy and sell surplus energy.
The national trading community of 400 utilities was created by the Federal Energy Regulatory Commission to promote competition in the industry.
Terms of the TradeWave deal were not disclosed. The purchase gives DST quick entry into a major market segment, said Trell Rohovit, chief administrative officer of the Salt Lake City company.
"We feel this is the largest electronic commerce community in the marketplace today," Mr. Rohovit said.
Oasis has done nearly $30 billion worth of electronic commerce transactions since it began operations in 1997.
DST, which employs 50 people, intends to serve most major industries, offering trust services that use public key infrastructure technology from multiple providers, including Entrust Technologies, Xcert, and CertCo.
"We are excited about the new leadership for TradeWave and the resources it will add to our capabilities," said Ken Faduik, the vendor's general manager. "The combined experience of DST and TradeWave will ensure that Oasis members have unbeatable customer service and reliability in their e- commerce solutions."
DST's technology is intended to let banks develop wholesale electronic commerce services that are highly secure. It has an alliance with the American Bankers Association in which the ABA becomes a root certificate authority, issuing certificates to banks that themselves become the trusted third parties.
Banks are a natural trust provider, said Scott Lowry, president and chief executive officer of DST.
"A trusted third party needs to be credible, with institutional standing. I believe this is the banking industry's business to lose," Mr. Lowry said at Faulkner & Gray's recent BankNet/InvestNet conference in Las Vegas.
"I believe banks own the last mile of authentication, yet they seem hesitant to get into the business," he added. "Others are moving in."
Public key infrastructure will become increasingly important to banks, said Rajeev Agarwahl, senior research analyst at Tower Group of Newton, Mass. Most Web-based cash management services "are really occurring on private, closed intranets and extranets."
Digital certificates will become "fairly standard as you move to a public network," he said.
DST also supplies certificate authority services to the Automotive Network Exchange, a virtual private network serving the automotive industry, and to Entrust Worldwide, an international, multi-industry secure network community maintained by Entrust Technologies.