Companies wanting to conduct business-to-business commerce over the Internet may benefit from a set of electronic purchasing specifications being tested by American Express Co.

Called Open Buying on the Internet, or OBI, the proposed standard is aimed at igniting an area of electronic commerce that many view as ready for an explosion.

"The research we conducted clearly confirms the view that the business- to-business segment represents the greatest promise for Internet commerce," said Thayer Stewart, vice president of marketing for American Express corporate services.

Many companies already have the computer infrastructure needed for electronic exchanges, Mr. Stewart said. They are being driven to make use of that infrastructure by a desire for lower operating costs, he said.

Though the largest companies typically use electronic data interchange to streamline the exchange of purchase orders and other documentation, such transactions are expensive to support because they require proprietary connections between buyers and sellers.

The American Express standard could give them a lower-cost option.

"There have been lots of structured data formats between buyers and sellers," said Paula L. Cappello, director of marketing for Actra Business Systems, a joint venture of Netscape Communications Corp. and GE Information Systems Inc., which supports OBI.

"OBI provides an Internet-based system that allows us to interoperate our program in non-Actra environments," said Ms. Cappello.

Other technology companies supporting OBI are Microsoft Corp., Oracle Corp., Intelisys Electronic Commerce, and Open Market Inc.

"Although OBI is not really high-technology, it does help simplify messaging from one system to another," said Jonathan Weinstein, group product manager for Internet commerce at Microsoft.

Because OBI does not require the simultaneous transmittal of financial information, the protocol is designed to complement, not compete with, the Secure Electronic Transaction standard put forth by MasterCard and Visa, said Mr. Stewart.

American Express' reason for getting behind OBI are clear.

"They want to facilitate the payment," said Gary Craft, an analyst at Robertson, Stephens & Co. in San Francisco. "This is where American Express makes their money."

"You are going to see the business-to-business market drive the adopting of smart cards. And there is a lot of value in controlling the real estate on the card," Mr. Craft said.

OBI grew out of an experiment done early last year at the Massachusetts Institute of Technology with VWR Scientific Products and Office Depot.

Led by American Express, about 25 Fortune 500 companies teamed up last fall to create the Internet Purchasing Roundtable, a group that set the requirements for the newly named OBI.

The list of commercial suppliers grew to include Corporate Express, Olsten Corp., and W.W. Grainger.

The list of corporations on the buying site includes Apple Computer, BASF Corp., Ford Motor, General Electric, and National Semiconductor.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.