Electronic commerce experts reacted positively to the recent news that Verifone Inc. and Oracle Corp. have teamed up to develop a comprehensive Internet payment system.

But along with their optimism came a warning: that bankers should stay abreast of their customers' needs, lest software and technology companies interpose themselves and usurp the banks' roles.

"The payment system just keeps moving out further and further, and banks could be left sitting with a little piece of it in time if they are not careful," said David Van L. Taylor, an executive vice president at the Bank Administration Institute.

Calling the Silicon Valley marriage of Verifone and Oracle a "powerful combination," Mr. Taylor said that banks must pay close attention to the emerging structure of corporate technology partnerships and carve out strong roles for themselves.

"If you let your mind wander here on something like this, you'll see at the end of the day the merchants have everything they need," Mr. Taylor said.

David Weisman, an electronic commerce analyst at Forrester Research in Cambridge, Mass., called the alliance "a great step" but said he feared "short-term merchant confusion."

"I think there's going to be a tremendous amount of excitement that this is going to be real," Mr. Weisman said. "But I think that merchants are going to wonder: who do I go to? Do I go to my bank? To Netscape? To Verifone?"

These cautionary words come on the heels of last week's announcement that Verifone and Oracle - known for point of sale systems and relational data base software respectively - plan to roll out a secure, end-to-end payment system for the Internet by the third quarter.

Oracle plans to supply its WebServer software, which lets Internet users browse on-line for goods and services. Verifone would bring to the table its secure payment software.

Together, the technologies would let consumers make instant credit card purchases on the Internet. Over time, the two companies say, the technology also will support the use of electronic cash and checks, plus debit cards and smart cards.

"Real-time payment transactions on the (World Wide) Web simply don't exist," said Karen White, senior vice president of Oracle.

Ms. White said that merchants must now use cumbersome clearing and authorization methods to accept credit card transactions, and said that these methods would be inadequate to handle the projected volume of Internet transactions. She cited published projections that the Internet may grow into a $50 billion to $200 billion market by the year 2000.

"You're never going to get hundreds of thousands of Web transactions unless they're conducted in real time," Ms. White said. "Once you get to any kind of volume, you bring it to its knees."

The companies do not seek to develop a new proprietary standard; both are accepting the Secure Electronic Transactions, or SET, protocol agreed to by MasterCard and Visa. Instead, they are looking to build an open and flexible payment system that is based on the notion that transactions will be secure.

"What really has not been addressed yet is the whole set of payment applications that allow any consumer to buy from any merchant using any payment method," said Roger B. Bertman, vice president and general manager of Verifone's Internet commerce division.

Once the system is up and running, Mr. Bertman said, a customer would be able to select an item for sale on the Internet, click onto a "pay window," and select a payment method.

"That's the equivalent to handing your credit card over to the merchant" in a conventional store, Mr. Bertman said said. The authorization, settlement, and reconciliation functions would be taken care of automatically, he said.

Robert Chlebowski, the senior vice president of business development at Wells Fargo & Co., compared the development to the creation of new types of appliances that plug into a standard electrical frequency.

"Wells is very happy that these two industry leaders have gotten together to really take this to the next stage," Mr. Chlebowski said. He predicted that the resulting product "will enable Internet commerce to really take off."

Verifone has pioneered the use of instant card authorization terminals in shops around the world; the new product is meant to represent an on-line counterpart.

"This gives the merchant the ability to offer on the Internet everything they have in the shop and for their customers to pay for it," Mr. Taylor said.

Earlier this month, Netscape Communications Corp. and Verifone forged a separate pact to develop payment solutions. That agreement is geared toward back-office procedures rather than consumer-oriented transactions.

Industry observers agree that the effort to produce a secure payment system has so far been progressing in patchwork fashion, with no single company or strategic alliance coming forward with a fully sewn quilt.

Scott Smith, an analyst of electronic commerce at Jupiter Communications Co. in New York City, said that the agreement between Verifone and Oracle is "not the be-all and end-all" solution for Internet payments, but is nonetheless a "significant first step."

"The pieces are starting to fall into place, the big players are starting to align," Mr. Smith said. "No one has the full solution. It just takes a little bit of everybody."

And while banks like Wells Fargo are credited with staying at the crest of technological change, analysts say that others are falling behind. They predict that the laggards may find themselves squeezed from the market if electronic commerce starts soaring.

"If it stays the World Wide Web of information only, it's going to become the dead web pretty quickly," Forrester's Mr. Weisman said. "It's got to become transactional to stay alive, and banks are still going to be the logical places to look for solutions."

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