As the founder of Verifone Inc., the nation's leading supplier of point of sale authorization systems, William N. Melton played a major role in making the credit card business what it is today.

Five years after retiring from active participation in that company, the entrepreneur got involved in another startup, one he hopes will have a similarly seminal impact in electronic commerce.

The mission of his company, Cybercash Inc., is to create a secure means for financial transactions on the information superhighway, which includes the web of computer networks known as the Internet.

Given the interest that bankers and retailers have expressed in providing on-line shopping and other interactive services, Mr. Melton believes Cybercash could prove more successful than Verifone and other endeavors in reshaping consumer payment habits.

"This is a totally new market that didn't exist two years ago," Mr. Melton said. "And none of us, inventors and bankers, should be condemned for not having total clarity."

Mr. Melton, 52, established Cybercash last August. The Reston, Va., company's first order of business is to develop the means to make sensitive data, such as credit card account numbers, secure as they are transmitted over public and private computer networks.

Two months ago, Cybercash signed its first direct bank client, Well Fargo & Co. Officials at the San Francisco bank said it plans to test Cybercash's on-line payment service at about 20 of its 26,000 credit card merchants in the first quarter this year.

Cybercash also says it will do a pilot with Banc One Corp., although the two have not officially made a deal. The Ohio-based banking company and Cybercash - as well as Wells Fargo and several other large and innovative banks - are members of Commercenet, a consortium of companies in many industries exploring ways to use the Internet.

But in wanting to support and promote electronic commerce, Cybercash is already meeting stiff competition. Some are new ventures, such as Netscape Communications Corp., Open Market Inc., and First Virtual Holdings Inc. In another case, software giant Microsoft Corp. formed an alliance with Visa International with the similar aim of on-line transaction security.

But industry observers say Cybercash may hold a trump card in Mr. Melton's experience with the banking and the world of financial transactions.

Before his ground-breaking work with point-of-sale services in the 1980s, Mr. Melton had other payment-processing experience under his belt.

In 1971 - a decade before Verifone's birth - Mr. Melton founded Real- Share Inc., providing data base and telecommunications services for check guarantees. Real-Share pioneered the use of minicomputers, voice response systems, and distributed processing for financial transactions. In 1979, Mr. Melton sold his venture to TeleCheck Services, now part of First Financial Management Corp., for what he says was "a few million dollars."

After a two-year hiatus, Mr. Melton was at Verifone, responding to the credit card industry's need to get accurate and secure transaction authorizations to merchant points of sale. Verifone was able to manufacture and sell compact terminals for $500 each. It has since grown to $300 million of annual sales, with four million devices installed worldwide.

What Verifone terminals do - capturing and transmitting card and transaction data - is much the same as what Cybercash's software promises to deliver for transaction data entered into personal computers.

The similarities do not end there. Neither Verifone nor Cybercash is out to make great advances in technology; they focus on applying available hardware or software to handling payments.

"If you look at what Verifone brought in, it was not rocket science," said Magdalena Yesil, the vice president for marketing at Cybercash. "The key was understanding how the banking world could use it."

After leaving Verifone in 1989 - he still maintains a seat on the company's board - Mr. Melton settled into "quasi-retired, quasi-venture capitalist" status.

He stayed active in payment services. In 1991, he became one of the primary investors in Transaction Network Services, a point-of-sale processing network, which went public last spring.

"My special skill is in seeing new opportunities and bringing new businesses through the greenhouse stage," Mr. Melton said.

Cybercash was born from intensive discussions early last year between Mr. Melton and fellow founder Daniel C. Lynch, the company's chairman and also the founder of Interop Co., the largest trade show for the Internet.

The two envisioned an onslaught of electronic commerce, and a consequent for banks participating in these transactions to ensure data security.

They assembled a management team that incorporated both banking and Internet expertise.

Mr. Melton calls Stephen D. Crocker, his senior vice president for development, a "guru of security." He developed one of the earliest nodes on the Internet 25 years ago.

Bruce G. Wilson, the chief operating officer, has worked for more than two decades in software and telecommunications, specializing most recently in electronic funds transfer.

Steven W. Klebe, director of financial industry sales, has Verifone experience.

Meanwhile, Cybercash's West Coast rival, Netscape, is making headway of its own, announcing deals with BankAmerica Corp. and First Data Corp., through which the company has established links to other banks, including First Interstate Bancorp.

But in the fast-changing Internet world, the early leader does not always finish on top. Mr. Melton keeps his eye on the larger scheme of things, keen on making his software "browser independent" - meaning that it can operate under any interface and with any other system.

He learned the importance of such interoperability during the early days at Verifone, when "as many as six terminals (were) lined up on a counter" because no one terminal could handle all payment methods.

From this perspective, Mr. Melton sees himself as an "interpreter" for bankers of the language of electronic commerce.

"The Internet is going to happen, with or without the bankers," he said. "But the bankers, the bright ones, are going to make this an opportunity."

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