Cybercash Inc. has licensed Carnegie Mellon University's micropayment technology, NetBill for $2.2 million.

The technology for low-value transactions over electronic networks has been incubating since 1991 within the Pittsburgh university, which plans to test it with Mellon Bank Corp. this fall.

Then Carnegie Mellon would turn NetBill over to Cybercash in hopes of widening NetBill's scope and availability.

NetBill, supported by $5 million in federal funding over the last two years, is geared toward use in an academic setting. With Cybercash on board, Carnegie Mellon hopes to turn what started as a graduate student research project into a viable commercial product.

"What's happened at CMU over the years is a really first-class piece of government research," said Stephen Crocker, Cybercash's chief technology officer. "Those guys have done a really incredible job.

"But at the same time it's important not to put it in the same category as commercially developed software," Mr. Crocker said. "There are lots of issues they haven't had to think about, and the level of effort is different."

Cybercash of Reston, Va., already offers an on-line "wallet" that consumers can use to buy items from participating merchants on the Internet with credit cards and electronic coins. An electronic check component is now being piloted.

First Union Corp. is among the banks in various stages of offering their own branded versions of the Cybercash wallet.

One reason for the NetBill license is strategic: Cybercash lessens the chance that the NetBill technology could emerge as a competitor.

More important, Mr. Crocker said, the partnership gives Cybercash entry into the academic world, which is highly "wired" and therefore seen as ripe for electronic commerce. And NetBill includes technological features that Cybercash would like to incorporate.

"They have explored how to support public terminals," Mr. Crocker said.

"In our models, we assume everybody has his own personal computer. In their model, they're dealing with a university environment where there may be public workstations."

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.