Is it possible to operate a successful consortium - by definition, a cooperative effort - with a group of competing companies?

Seven months since it came together, the Joint Electronic Payments Initiative is attempting to answer this question, and to lend direction to electronic commerce at the same time. An international melange of high- profile academics and industry engineers, the organization that members pronounce as "jeppy" is striving to create transactional standards for the Internet while, individually, they keep trying to outdo one another competitively.

Members agree that corporate motives have slowed collective progress. But members have managed to put aside their differences long enough to hammer out a method for negotiating payments on the Internet.

"Everyone has a vested interest in furthering electronic commerce," said Chandra Das, chief executive officer of Vendamall, a New York company that signed on as a participant but later pulled out because of a contract it had with another consortium member, Microsoft Corp.

"Business sometimes makes strange bedfellows. Everyone recognizes that if they're able to make this thing work, then everyone is going to benefit."

JEPI's stated goal is to lead the way toward a common payment mechanism for Internet commerce, and to test it.

But JEPI has learned it isn't easy to replicate in an electronic context the negotiation and payment that take place when a consumer stands before a clerk in a retail store.

JEPI wants to enable computers to figure out which payment instrument the merchant and customer have in common - be it digital cash, electronic check, or a credit card-based system - and to facilitate the transaction.

"If the customer and the merchant have multiple payment systems in common - say, they could pay with SET (the MasterCard-Visa Secure Electronic Transactions protocol) or Digicash's Ecash or Cybercash's Cybercoin - then you would expect choices for the user, or they could default to one," said Donald Eastlake, Cybercash Inc.'s JEPI representative.

"There's the possibility of multiple, one, or zero payment systems in common, and most likely the merchant will be able to tell that through JEPI," said Mr. Eastlake, a senior systems engineer at Cybercash.

"Either way, there are a number of advantages," he said. "The user doesn't go through a shopping experience and then end up with a final Web page that has 47 different payment options on it."

Phase 1 of JEPI - the creation of a standard - is complete. Phase 2 - the live demonstration - will be ready by yearend, members predict.

"The goal for Phase 1 was to come up with a negotiation protocol to have both the client (computer) and the server on the Web be able to select the payment system to use without any prior arrangement," said Daniel Dardailler, JEPI project manager.

The idea, he said, is "to have the system decide which payment system is the most useful at the moment."

Mr. Dardailler, an engineer who works near Nice at France's national computer and automation institute, INRIA, said: "We don't have any competition in this area. It's the only negotiation protocol that's around."

For this reason, JEPI members are optimistic that the Internet community will embrace their standard. MasterCard and Visa have indicated interest in endorsing, members said.

The card associations' SET protocol is scheduled to be bundled into a JEPI demonstration. The second-phase, live test will also involve a discussion about how smart cards, digital signatures, and other data security technology might fit into the picture.

The latter phase will also include new corporate partners. Mr. Dardailler said companies are clamoring to commit money and staff time.

"Because it was successful, a lot of people want to be a part of JEPI," he said. The consortium will choose the companies that are most forthcoming with resources.

Two nonprofit consortiums, CommerceNet and the World Wide Web Consortium at MIT, founded JEPI last April. JEPI has several core participants that include IBM, Open Market Inc., and Verifone Inc.

Plans call for the inclusion of Keio University, Tokyo, and other Asian and domestic partners. This will increase the logistical difficulties that have bogged down the project (members communicate by E-mail and teleconference, but seldom can gather as a group), but the global reach is considered desirable.

"We've defined a protocol that enables both the Web server and the Web client to talk," Mr. Dardailler said. "Everything else is sort of nice, but the important thing is to define a language by consensus, so that people agree to write their software to it."

That is what IBM is likely to do, said Mark Linehan, a research staff member and the computer giant's chief representative to JEPI.

"We believe that in the future there will be more than just credit card payments, and we think that the world will be significantly enhanced for the consumer and the merchant if we provide this style of negotiation," Mr. Linehan said.

"From our perspective, this is a research project, and it's a trial to understand the various dimensions of the problem."

As research proceeds, the participating companies are jockeying for position in Internet commerce. Microsoft and Verifone have come forward with a merchant server. Cybercash recently introduced its Cybercoin as a cash-equivalent, and IBM is spearheading the Integrion coalition for remote banking.

"I consider it a small miracle that JEPI got as far as it did - they seem to be quite on target," said Thomas K. Wills, the former JEPI project manager at CommerceNet, whose departure for Verifone in August delayed the project a bit.

"You can imagine the kind of tensions there would be," Mr. Wills said. "There are a lot of companies coming out with cutting-edge technology that want to guard it very carefully and want to judge how much to expose to their biggest competitors.

"That has been very interesting to watch. There has been a lot of withholding, and what can be categorized as slips."

Mr. Wills said the JEPI protocol "stands a very good chance of being a standard" because of nods from Visa and MasterCard and other "players who are behind it."

But analysts say it remains to be seen whether the JEPI standard will be as widely adopted as SET promises to be.

Other consortiums have developed standards and protocols only to find that "when they're done, nobody wanted to implement them," said Victor Wheatman, an electronic commerce analyst at the Gartner Group in Stamford, Conn.

"If some market-leading vendors - Microsoft, et al. - manage to pull something together more quickly and implement them on all the servers, the work of JEPI may end up being for naught," Mr. Wheatman said.

So far, analysts have been watching JEPI's work from a distance and say they will take a closer look when the live test begins.

"There are still not enough consumers, there is no real market, and we all understand that," said Fabrice de Comarmond, executive vice president of a French company and JEPI core member, GC Tech, that has developed an Internet payment system.

Mr. de Comarmond said JEPI's aim was to foster commerce by making the payment process easy and seamless: "One of the main issues is, when you enter a store, you enter to buy and not to pay."

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