A company aimed at securing financial transactions over the Internet is close to launching what it believes will be the first service to let users obtain digital identification numbers via the World Wide Web.
The company, a Redwood City, Calif.-based startup called Verisign Inc., was formed this year with the help of a number of organizations interested in electronic commerce. Investors include Visa International, RSA Data Security Inc., and Ameritech Corp.
Since its founding, Verisign has also partnered with such technology leaders as Netscape Communications Corp. and Apple Computer Inc.
Netscape has become the first to take advantage of the new service by providing access to digital ID certification through its Navigator 2.0 Web browser.
The two companies will begin testing the service in late October.
Digital IDs, used to authenticate users and transactions sent over the Internet, will play a major role in assuaging the security concerns that have hampered the progress of electronic commerce, industry experts said.
Most of the Internet security efforts under development are focused on data encryption, which scrambles information sent over the network. Digital IDs go a step further by ensuring that data were sent by the right person.
Verisign has likened the identification numbers to an "Internet driver's license" that proves an individual's on-line identity. IDs are issued by Verisign or a third party that performs background checks to verify the user's identity.
Once issued, the digital ID can be used with any applications that agree to recognize its validity, such as Netscape's Navigator.
The IDs, which will eventually be valid for one year, will help merchants and other individuals confirm the identity of Navigator users, as well as ensuring that the information transmitted between users cannot be refuted at a later date.
"This new authentication capability will accelerate the emergence of electronic commerce," said Mark Andreesen, vice president of technology at Netscape.
Web Augustine, a spokesman for Verisign, said in the next few months the company will evangelize on the benefits of digital ID technology for banks and merchants.
Financial institutions can make use of the technology for home banking and electronic commerce by buying bundles of digital IDs and issuing them to customers. The IDs could then be used to verify customers' identities before the bank gives access to account information.
Verisign established a financial services group earlier this month that will focus on marketing the technology to banks.
Verisign is marketing two types of digital IDs: public and private label.
The public IDs, those available to individuals and organizations through the on-line issuing service, are divided into four levels designed to meet the security needs within different environments.
These range from "class one," for casual browsing on the Web and for secure e-mail, to "class four," for applications such as authorization to trade financial securities, and access to corporate data bases.
The higher the level, the more thorough the investigation of users before an ID is issued.
Electronic banking applications and large-sum purchases from electronic malls are best served by "class three" IDs, according to Verisign.
Banks are expressing the most interest in private-label IDs, Mr. Augustine said, because these IDs can be customized for each banking client. For example, a bank can work with Verisign to determine the requirements for getting an ID and establish credit limits and other attributes of an ID, he said.
The company declined to name the few banks it said it is working with, but it might announce its partners by the end of the year, Mr. Augustine said.