GC Tech Inc. has announced a plan to integrate its GlobeID Internet payment system with Microsoft Corp.'s Merchant Server software.

The deal is not exclusive. Microsoft has made similar agreements with other on-line payment providers, including First Virtual Holdings Inc. and Cybercash Inc.

But it is significant for GC Tech, which has implemented its system in Europe but has not yet penetrated the U.S. market.

A distinguishing feature of GC Tech's payment software is that it does not transmit credit card numbers or other sensitive information over the Internet. Unlike Cybercash and Digicash Inc., which use encryption to scramble vital data and send it across the network, GC Tech relies instead on what the company calls "trusted intermediaries"-namely, banks-to serve as transaction intermediaries.

Under the GlobeID system, a trusted intermediary holds a customer's financial information and certifies and authenticates a transaction. Like in the Cybercash system, the consumer's interface is a virtual "wallet"; like First Virtual's system, the GlobeID system handles credit card information off-line.

Microsoft's Merchant Server software helps merchants to sell their goods on-line by letting them post transactional sites on the World Wide Web.

"We are extremely excited to be integrated with Microsoft Merchant Server, as merchants can now develop and run their Internet storefronts with Merchant Server and have their transactions authenticated, certified, and processed by a GlobeID payment operator," said Jean Philippe Sarraut, GC Tech's chief operating officer.

Rebekkah Kumar, business development manager for Microsoft's Merchant Server, said the GC Tech agreement is part of an effort by Microsoft to "try to fill the payment gap internationally."

"What we're trying to do with payment is make sure that we offer all options to the merchants-for instance, micropayments, debit cards, and smart cards when they come down the road," Ms. Kumar said.

"We're in a nascent market that's undefined, and the product that we offer is an open product," she said.

GC Tech originated in Paris but is now based in New York. The first financial institution to offer GlobeID was Kleline S.A., a division of the French Paribas banking group. It has signed up more than 100 merchants and has been processing transactions since September.

"GlobeID allows merchants to accept payment on Merchant Server sites in a variety of currencies, thus making international commerce over the Internet much simpler," said Hank Vigil, general manager of the Internet commerce group at Microsoft.

Financial terms of the deal were not disclosed.

In a separate announcement, GC Tech introduced a new release of GlobeID, version 1.5. The new version supports the Secure Electronic Transactions protocol agreed to by Visa and MasterCard.

Among other features, the enhanced software lets merchants specify both the types of payments accepted-such as credit cards, debit accounts, or frequent flier miles-and the brands of payment instruments, like Visa, MasterCard, or Discover.

"We continue to add features to our software that make it more adaptable and as appealing to as wide an audience as possible," said Pieter Van der Linden, GC Tech's chief technology officer.

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