Trintech Pushing Virtual Credit Cards

Just as electronic merchants, portal companies, banks, and credit card processors seem to be taking the concept of digital wallets to heart, Trintech Group wants them to change their thinking.

Trintech, one of the more aggressive product developers among companies offering payments software for the Internet, is making a proposal that essentially does away with digital wallets as we know them.

The Silicon Valley vendor calls its innovation a "virtual credit card." It would be delivered to, and stored on, a personal computer, and when it comes time to make a purchase from an on-line retailer, the system would enable a "one-click payment."

It goes by the name NetIssuer, and will be on the market in August.

Trintech chief executive officer John McGuire said NetIssuer "could revolutionize the shopping experience for consumers, merchants, and banks."

There is irony in this. Trintech is one of a host of providers-including computer giants such as International Business Machines Corp., Internet-era ventures such as Cybercash Inc., and numerous start-ups-that worked hard to streamline the software that approximates a conventional physical wallet, where consumers store payment choices and related personal details such as billing addresses.

"We believe there is a shift now away from the digital wallet," Mr. McGuire said.

Microsoft Corp. is apparently part of this movement. With a recently announced technical framework for electronic commerce, the Redmond, Wash., software giant has disclosed only sketchy details of a "single-click" wallet-type product called Passport.

Trintech has had a long-term working relationship with Microsoft, and Mr. McGuire revealed in an interview during the Cardtech/Securtech conference in Chicago that Passport draws on Trintech's technology.

If some more of the biggest corporate names in electronic commerce and payment systems also climb aboard his bandwagon, as Mr. McGuire confidently suggested that they would, this would be only the latest wrinkle in what is, by the standards of accelerated "Internet time," an aging concept.

"Well, that's the Internet," said Mr. McGuire, who started Trintech as a point of sale transaction software company 13 years ago and recently recast it as an Internet payment specialist with a base in Campbell, Calif.

"We keep trying the models until something sticks, and when it sticks, we replicate it," he said.

Initial versions of virtual wallets were unwieldy, requiring downloads of large programs to PC hard drives, and they turned consumers off. Wallets with credit card information and digital certificates are one of the components of SET, the MasterCard-Visa Secure Electronic Transaction protocol for the Internet, and those early difficulties were among the factors that hindered attempts to gain widespread acceptance of SET.

In their improved form, wallets or variations of them are proliferating on prominent Internet merchant sites such as Amazon.com and in the shopping areas of portals and aggregators such as Lycos and America Online.

Newer wallets are "thin," or "server-side," meaning they place little burden on the customer's PC. Quick "one-click shopping" has become the norm, though initial setups or registrations can still be complicated, and there are variations in how the payments actually get completed.

With a product announcement May 4-Customization Wizard for NetWallet Version 2.1, formerly called PayPurse-Trintech gave financial institutions a tool for uniquely branding and customizing the digital wallet.

But Mr. McGuire said he is generally dissatisfied with how wallets have unfolded and wants to get on to something else. A different form of wallet that would hold multiple payment options could eventually evolve from the virtual credit card, he added.

"The link between the on-line consumer and merchant is often severed because the payment process is too cumbersome," Mr. McGuire said. He said the simplified NetIssuer can help bank card issuers-debit as well as credit-and merchants alike establish and enhance customer relationships and loyalty.

"This 'e-card' solution also offers a broad range of marketing and branding opportunities for credit card issuers and maintains strong security throughout the entire process," Mr. McGuire said. The data encryption is based on SSL, the Secure Sockets Layer protocol that SET has failed to displace but that has proven very reliable in practice.

Mr. McGuire showed a mockup of NetIssuer in a presentation Tuesday at Cardtech/Securtech. The virtual credit card was represented by an icon on a computer screen. At the point in the shopping session when credit card information was requested, the shopper clicked on the icon. A card image then flashed on the order form and the pertinent information-including name, account number, and address-was automatically filled in.

He described this as "a more convenient way of doing shopping" than other alternatives. A key feature, he said, is that all procedures- including card issuance and delivery, credit checking, and even the attachment of digital certificates for on-line customer authentication-are automated.

All the low-cost advantages of global Internet distribution and electronic mail can be brought to bear. This means card-issuing banks can consider hundreds of millions of on-line consumers as sales prospects, using "segment of one" customization techniques, Mr. McGuire said.

Mr. McGuire has been openly critical of the banking industry's slowness to seize Internet commerce opportunities, saying they have left an opening for nonbank payment processors to serve multinational merchants with specialized transaction-processing needs. He expressed amazement that very few major banks-Bank One Corp.'s First USA division being the most obvious- have made Internet marketing a major aspect of their card-issuing strategies.

He warned in the interview that if banks continue to "move glacially, digital companies will embrace this faster."

"Will it be a bank credit or debit card brand, or just a loyalty brand" that makes the big virtual splash, "or will a new Discover come along out of the nowhere and launch a whole new brand for payment?" asked Mr. McGuire.

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