A French electronic commerce company that did not quite catch on in the United States has found a new life.
GC Tech Inc., which despite its French roots tried to draw on U.S. Internet talent and investment capital, has been through a bankruptcy filing and reemerged as GlobeID Software.
With headquarters in Paris, GlobeID hopes to sell its transaction and certification software to U.S. retail banks.
It has set ambitious goals for playing a central role in-and profiting from-an expected explosion in on-line payment activity. It is emphasizing partnership arrangements, both in business ventures and in raising its own capital.
"We are currently talking to M&A groups" in the United States, said Fabrice de Comarmond, GlobeID senior vice president for partnerships and former executive vice president of GC Tech. "We are going to put our money and effort into marketing our security software and integrating our channel partnerships.".
The former GC Tech was stymied a year ago by a disagreement among its partners. When one of the co-founders, Laurent Adamowicz, refused to agree to terms of a $9 million private cash infusion, its investors pulled out. GC Tech filed Chapter 11 in the United States and liquidated operations in France, where it employed about 50 people.
But GC Tech's technology team stayed intact. Headed by Francois J. Chaillou, it received funding from the CP8 smart card division of Bull, the big French computer company. A holding company was formed, Edeltrust, to take over GC Tech's Internet payment product, called GlobeID.
Edeltrust owns 31.5% and Bull 68.5% of GlobeID Software's stock. Bull has announced its intention to integrate GlobeID technology into its Smart Commerce product line.
GlobeID Software's U.S. base will be at a Bull subsidiary in Foster City, Calif. Its business plan calls for hiring 30 people for sales and marketing by yearend.
In competition with Cybercash Inc., GlobeID Software develops and markets software for securing and certifying virtual transactions.
"It is a slow-growing market," said Mr. de Comarmond. "Banks have taken their time and lost market share."
The GlobeID Banking 2.0 package includes features and standards adapted from GC Tech for Internet payments. These include software modules called IPH (Internet Payment Handler) and IVC (Internet Virtual Cash), as well as a retail banking program with home banking and financial electronic data interchange, which can support electronic bill payment and presentment.
"We assemble and sell a software solution to any bank," said Mr. de Comarmond. It is a "nomadic access, server-based solution" with foreign exchange built in, along with nonrepudiation-a key antifraud component-and digital receipts.
The set of payment options can include credit card, electronic check, direct debit, virtual cash, micropayments, and electronic purse. The technology also supports standard payment protocols such as the credit card industry's Secure Electronic Transactions; C-SET, the French standard for chip card payments on the Net; Open Financial Exchange; Gold; and Secure Sockets Layer.
"We think our Internet Virtual Cash has a lot of potential," Mr. de Comarmond said, because it integrates seamlessly with electronic cash strategies of Visa, Mondex, Proton, and others.
The software is independent of any access device.
"Our business model is to sell software that does not depend on the number of banks operating the system but on their market share of customers," said Mr. de Comarmond. GlobeID's home banking module starts at $100,000 and costs up to $400,000 for the whole suite.
GlobeID Software benefited by inheriting some GC Tech customers. One of its licensees was KLEline, part of the Paribas Banking Group in France. More than 30,000 consumers had access to the GlobeID payment system. KLEline has renewed its commitment to GlobeID technology.
Another licensee, Europay International, MasterCard International's Brussels-based affiliate, is a customer of Bull SmartGate, a C-SET gateway. However, a relationship with Banco Bamerindus, a leading Brazilian bank, folded when the bank was bought by HSBC Holdings of London last year.
When asked why GC Tech did not succeed in the United States the first time around, Mr. de Comarmond replied, "I don't think our failure was due to GC Tech's business." As a French company, he said, "it took a longer time for us to secure funding."
He added, however, that like the Cybercash management team, GlobeID's executives have learned from their mistakes.
"We don't know how many banks we'll get," Mr. de Comarmond said. "It will depend on how bold they become and if they wish to continue losing market share," in particular, to telecommunications companies.
On a more optimistic note, he added, "We're shooting for a 40% market share in revenues from Internet payments. If we secure the right partners, we can do it."