Visa U.S.A. is among the first companies getting behind a new digital classification system for products sold over the Internet.

The coding system-developed by the United Nations Development Program and Dun & Bradstreet-assigns eight-digit numbers to more than 8,000 items, from computers to ballpoint pen cartridges.

The idea is to create an international standard that will replace the conflicting coding systems that individual companies use in tracking sales.

Visa sees the system as a basis for wider use of corporate purchasing cards.

"Right now, if you want to buy computer equipment in France, they might have a different code there," said Bruno Perreault, senior vice president of commercial products at Visa U.S.A. "This will help further streamline buying and selling in the physical or virtual world."

Within two months, Visa and Dun & Bradstreet will begin testing the code with certain merchants and purchasing card issuers. Visa would not identify the participants.

Mr. Perreault said the code is ready but will take several years to deploy fully.

Visa and MasterCard International have made business-to-business electronic commerce a priority. Both are working to enhance their products for this market, and talking up the potential for banks.

A recent study by WEFA Group, commissioned by Visa International, predicted 69% annual growth in on-line business purchasing for the next five years. Volume would top $1 trillion by 2003, far more than the $100 billion in on-line consumer spending predicted by 2002.

Last year, $77 billion was spent by businesses shopping on-line, according to Burlington, Mass.-based WEFA.

"The business-to-business market is larger in terms of forecasted opportunity, but definitely more complicated," said Stephen Koukis, product director in the commercial products group at Visa International in San Francisco.

Until now, he said, attention has been focused on eliminating paperwork in business purchases, rather than on payment reconciliation and settlement.

Visa said the WEFA study will help member banks pinpoint industries and countries to focus on.

WEFA's scan of 17 countries indicated that 94% of purchase volume would come from the United States, France, Germany, Japan, and United Kingdom. The United States alone would account for 59%.

Though 95% of on-line buying now takes place on the Internet, WEFA said that by 2003, 27% of volume would be on the confined extranets that link companies with suppliers.

Large corporations with more than 500 employees have the highest dollar volume per company of on-line sales, the study said, but companies with fewer than 50 employees will account for the fastest growth in this area.

Visa is working with banks to target different needs in the small- business market and attract more customers.

"Nonbanks have made more headway than banks" attracting small business dollars, Mr. Perreault said. "Most banks we've talked to have small- business relationships but don't share learnings and best practices across the organization."

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