Buttoned-down bankers and tempestuous technologists seem to have little in common, but when it comes to financial applications for the Internet, they agree on one point: Standards are helpful.

Recent advances in standards-setting by bankers and their technology "partners" have given rise to a new wave of optimism that consumers will eventually embrace the Internet for both electronic commerce and PC-based banking.

The two technical standards-Visa and MasterCard's Secure Electronic Transactions, for Internet credit card transactions, and Open Financial Exchange, for banking through personal finance software-have been lauded as major steps forward in commercializing the Internet.

Proponents said the standards give bankers uniform and easy-to-implement specifications for developing Internet-based financial products and payment systems.

They added that the standards process has helped build consensus among often acrimonious parties, such as financial services providers, merchants, and the technology companies that build and maintain the Internet's infrastructure.

But some observers also see a dark side-namely that the path from high concept to concrete reality is often a tortuous one.

OFX has been promoted by the technology companies that have the most to gain from its implementation: software heavyweights Microsoft Corp. and Intuit Inc., and Checkfree Corp. Checkfree, which recently acquired Intuit Services Corp., has become the leader in electronic bill payment processing.

In contrast, SET has been a bank-led effort (through Visa and MasterCard), although technology companies such as RSA Data Security Inc., Microsoft, and IBM have played important roles.

"OFX was born out of the technology industry; SET was born out of the banking industry and is moving much slower as a result," said Karen Epper, analyst with Forrester Research in Cambridge, Mass.

"Home banking is here now, so I see OFX as more of a (workable) standard. It's issued by technology companies that meet banks' needs."

Bankers tend to agree, but not without reservations. Both Citicorp and NationsBank Corp. have tacitly endorsed OFX but are still developing their proprietary home banking systems.

Their ambivalence can be seen either as an effort to buy time until OFX is rolled out later this year, or as a sign that these deep-pocketed institutions simply choose not to have their all-important "customer interface" wholly controlled by Microsoft or Intuit.

With regard to SET, the future is more cloudy, analysts said. Since the standard was first proposed in 1995 as way to reduce the risk of cyber- fraud, turf battles among the card associations, merchants, and software companies slowed its development.

The current published version of SET is for testing only, and some critics contend that live transactions using the standard are not likely to occur until 1998.

"We are recommending to our merchant clients that are looking to sell stuff over the Internet to hold back on implementing SET until version 2 is released," said Victor Wheatman, analyst with the Gartner Group in San Francisco.

Mr. Wheatman said there is currently little incentive for Internet-based merchants to convert to SET, since many Web-surfing consumers happily send their credit card numbers "in the clear."

He noted Internet merchants pay credit card processing fees comparable to those charged to mail order and telemarketing firms. "It's unclear that the card associations will lower those transaction fees in order to move merchants onto SET," he said. "They may choose to keep the fees where they are for some time in order to pay for the costs of developing the standard."

Ultimately, consumers will decide the success or failure of OFX and SET, observers said. A recent American Banker article quoted an electronic commerce conference panelist who perhaps said it best: "The banking industry, unfortunately, does not move at Internet speed."

This Article Previously appeared in the American Banker Online.

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