A leading processor of card payments in Germany has turned to Xcert International Inc. of the United States for what could be one of the largest mass deployments of digital certificate technology.

Telecash Kommunikations-Service of Stuttgart, a unit of Deutsche Telekom that runs a network of 127,000 terminals at retail points of sale, plans to pave the way for secure on-line transactions using Xcert PKI products.

PKI, or public key infrastructure, refers to data encryption and associated technologies for the issuance and management of digital credentials that certify the identities of authorized system users.

Telecash, both through its corporate customers and in its other role as a reseller of Xcert systems, could be responsible for distributing these credentials by the millions.

Xcert marketing manager Tim Gage said Telecash, which was working with Xcert for a year before the companies' announcement this month, expects to begin enrolling consumers through card-issuing banks this summer.

Telecash is gearing up for compliance with a German law requiring that all transactions have signatures-the digital, data-encryption-based variety in the case of electronic payments.

The relatively advanced state of the digital signature law and the consolidated nature of the German financial and payments industry have Xcert and its customer highly optimistic about growth. Telecash claims a processing-market share of 50%, with monthly retail volume exceeding the equivalent of $1.2 billion.

"We expect to see a very rapid uptake of digital certificates in Germany," Rudolf Klos, Internet group manager at Telecash, said of a service that has been slow to catch on in the United States and elsewhere.

Telecash said its network serves about 50 million German bank card users. The country's Geldkarte electronic purse system is one of the largest smart card programs in the world-a fact that Mr. Gage said contributes to Germany's ripeness for public key infrastructure.

Digital certificates can be conveniently stored in smart card chips for portability, enabling the digital signatures to be generated at any number of computers and computing devices linked to electronic commerce sites. But Telecash intends to employ digital signatures on regular credit and debit card transactions as well as on-line payments.

"The German law is influencing the rest of Europe, and that puts them at least a year ahead of the North American PKI market," Mr. Gage said. "It gives us an interesting opening on what will happen farther down the line in North America."

"Telecash is spearheading the adoption of Xcert products as the PKI solution of choice for the European banking industry," said Xcert president and chief executive officer Thomas Nolan. "Germany leads the way in the adoption of public key infrastructure for the financial industry, and Telecash is an ideal partner for Xcert because of its unique position at the center of this industry."

Xcert, originally from Canada and now based in Walnut Creek, Calif., has focused on marketing to banks and banking-related entities, viewing them as ideal for assuring trust as commerce moves to cyberspace.

The company is also a PKI supplier to the American Bankers Association's ABAecom subsidiary. That venture, which also works with Zions Bancorp.'s Digital Signature Trust Co., wants to ensure that banks and other financial companies are ready to be certificate authorities, or CAs, as demand for e- commerce security materializes.

Mr. Gage said Telecash and ABAecom were both attracted to Xcert because of its ability to "scale up" to large volumes and to interoperate with other vendors' PKIs.

Telecash has deployed Xcert's SentryCA system for issuing certificates to bank card customers. It will use SentryRA, or registration authority, to support a network of thousands of digital certificate servers in bank branches and local government offices.

"Germany's digital signature law has opened the door for the rapid adoption of electronic commerce across the Internet," said Mr. Klos of Telecash. He said Xcert and Telecash "offer the crucial technology enabler for Internet merchants and financial institutions to take advantage of this new sales and distribution channel."

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