If firsts and biggests in the realm of Internet payments could be converted into real currency, Trintech Group of Ireland and Silicon Valley would be rich in more than just venture capital.

But bankers in the United States, the economic engine that will have to get cranking for global electronic commerce to fulfill newly inflated expectations over the next few years, have not been cooperating with Trintech's philosophies and business plans.

That frustrates chief executive officer John McGuire no end.

Trintech has not only been in the forefront of Internet payment processing, whether under the Secure Sockets Layer or Secure Electronic Transaction standard. It was not just among the first to get SET certification for its digital wallet software, or to prove interoperability with competing vendors such as International Business Machines Corp. and GlobeSet Inc.

On Jan. 1, its PayWare merchant software was used in the first euro transaction on a Visa card-but Trintech has yet another distinction.

It is also the first of these companies whose CEO has publicly scolded bankers for not seeing what is only too obvious to him: the payment system of the future slipping from their grasp.

Mr. McGuire let them have a piece of his mind at the American Bankers Association bank card conference last September in Philadelphia. He urged them to wake up before technology companies or faster-moving institutions from abroad lured U.S. retailers to "global solutions" that U.S. bankers were unprepared to counter.

In December, at Faulkner & Gray's Cardtech/Securtech West in San Jose, Calif., now Trintech's home away from home, Mr. McGuire chided bankers for failing to see that their competition "is not domestic any more. Savvy, technically oriented banks from around the world are approaching this as a global market."

That may work to Trintech's and other software companies' advantage. Mr. McGuire said his company, which he co-founded with brother Cyril in Dublin in 1986 with a focus on conventional point of sale terminals and credit card processing, is selling plenty of Internet payments software overseas. The buyers "see a global opportunity-a chance to go into new markets at very low cost."

John McGuire's point is that U.S. banks have the same opportunity and are in a position to "re-intermediate" the merchant-acquiring business that they ceded to third-party payment specialists in the 1980s.

Any bankers attending Mr. McGuire's presentation today at the RSA Data Security Conference, also in San Jose, are likely to hear more of this drumbeat.

By 1995, Mr. McGuire said, nonbanks led by First Data Corp. controlled 70% of U.S. card processing. At least equally ominously, by 1998 three- fourths of electronic commerce was being handled by nonbank system providers such as Cybersource, Cybercash, iCat, and Brokat.

"If I were a banker I'd be threatened by that statistic," he said. "The disintermediation is right in front of our noses."

Yet he claimed that during visits to banks, "halfway through a meeting a CEO will ask me if this Internet thing is really happening. That's such a disconnect. The phenomenon is being driven forward without the banks."

Things are different elsewhere. Having worked closely with Visa International, Trintech supplied software for the well developed Latin American platinum card program that includes issuance of digital certificates on smart cards.

VisaNet do Brasil, the merchant processor owned by Visa and Brazilian banks, sees the United States as part of its market for the handling of virtual transactions. Banca Nazionale del Lavoro of Italy, which uses Trintech's wallet, merchant, and payment-gateway software for electronic commerce, accepts the vision of what Mr. McGuire calls "global acquiring" and is pitching major U.S.-based multinational retailers, he said.

Retailers will buy into this, Mr. McGuire is convinced. Compared with bankers, they are "more focused and closer to customers' needs. Retailers are driving this phenomenon," and unlike the top-down, command-and-control businesses that bankers are accustomed to managing, "the Internet is driven from the bottom up. ... Bankers have an opportunity to take advantage of this change or witness further disintermediation."

Being part of that change and gaining credibility from business success give Mr. McGuire his license on outspokenness. Another of Trintech's on- line firsts was an international transaction using Secure Sockets Layer encryption on Netscape Communications Corp. browser software in 1996, on behalf of Swedish Post. Thus, Trintech has bestrode the gap between SSL and the MasterCard-Visa creation SET, or Secure Electronic Transaction, which remains a lightning rod of controversy.

The company has also benefited by strategic alliances with the German software giant SAP, with Microsoft Corp. and Oracle Corp., with major international airlines and the Air Travel Card system, and with the data encryption leader RSA Data Security Inc.

When Trintech announced the closing of a $20 million financing round last summer, the investors included funds managed on behalf of SAP co- chairman Hasso Plattner and RSA president Jim Bidzos. Others were investment houses BT Alex. Brown, Hambrecht & Quist, and BancBoston Robertson Stephens, whose senior electronic commerce analyst, Gary Craft, called Trintech a "finely positioned Internet payments organization."

Some of what they are supporting is research and development, which Trintech has housed at Princeton, N.J., to draw on the local scientific talent. (Mr. McGuire contended that because Trintech has always sought technological leadership, it was better prepared than others to adapt to the Internet rather than have to reinvent itself completely.)

In an October report, Mr. Craft said $1.5 billion of revenues are up for grabs through 2003 from banks and Internet merchants, and Trintech is serving both sectors-facing the likes of Brokat, GlobeID Software of France, IBM, and Hewlett-Packard Co.'s Verifone subsidiary.

"The market for commerce payment technology begins and ends with banks," Mr. Craft said, suggesting Mr. McGuire is right to focus on them.

With its high-powered backers and believers, Trintech is not just trying to rouse bankers up to Internet speed and the idea of global transaction acquiring. It is also trying to mediate the SSL versus SET standoff, and not just with words but with its Payware NetPOS product.

Announced in December, it "covers the spectrum of security standards," Trintech said. But Mr. McGuire said the road to banks' re-intermediation on the Internet is through end-to-end SET protocols on networks they control, and therefore Trintech built a migration path into Payware NetPOS.

Facing the reality that SSL is ubiquitous and SET, despite its greater security assurances and credit card bankers' best intentions, is not, the Trintech package fully accommodates SSL. "It's available today" and can operate at high speed, "so adopt it," Mr. McGuire said.

Then would come an incremental Step Two, where the consumer-to-merchant communication remains SSL but the bank-merchant link is SET, adding a more desirable level of data encryption and related forms of security.

Third on what Mr. McGuire calls his "four-step plan to competitive advantage" is "certless SET"-the end-to-end security ideal except for the fact that the cardholder does not have a digital certificate from a third- party issuer. This is the equivalent of a regular credit card payment without a customer signature; as in full SET, the cardholder account number is hidden from the merchant and the cardholder is assured that the merchant is genuine.

The final step is end-to-end SET including a full-fledged certificate in the customer's wallet software.

"We say safety belts in cars are good and should be used, air bags are better, but we wouldn't retrofit air bags on older cars," Mr. McGuire said. "In the same way, we say use SSL today, it is ubiquitous and available, and over time migrate."

The stepped approach, he contended, can get banks "back into the payment cycle" at a time when hard-driving technology companies "are doing their land grab," whether it is Microsoft with its smart card operating system or Internet portals like Excite and America Online promoting electronic commerce with digital wallets of their own.

"Banks' pace hasn't kept up," Mr. McGuire said, but they can still reassert themselves on the notion that "without payment, commerce is not commerce."

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