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Internet resources on e-money and smart cards - On the Net - electronic cash and credit cards - Column

Hal P. Kirkwood, Jr.

The money in your wallet...the change in your pocket...they are all on the verge of becoming obsolete - relics of a past where a person had to actually hold tangible currency that equaled a specific value set by a government. The jar of coins you now have in your home will become a collector's item or a conversation piece; much like stone beads or gold doubloons are now.

Some outrageous statements? Perhaps. Impossible you say? Perhaps not.

Smart cards and electronic cash are the future whether we are ready for it or not. Some proof? How about the increasing use of credit cards for purchasing goods and services, the increasing availability and use of long-distance phone cards that hold a specific value (money and time), the increasing use of student IDs on campuses for purchasing everything from books to lunch to beer, and the creation of the debit/credit card? Several European countries are using smart cards on a regular basis. Companies such as Quicken and CheckFree that allow you to pay bills and conduct other transactions electronically are becoming increasingly available. I could go on and on.

The Internet is pushing this need/demand for electronic payments. The desire is to have the safe, secure, and anonymous ability to make purchases online or in a real store as if you were using hard currency. Some factors to consider: credit cards leave a paper trail for marketers to follow (not to mention the interest rates), currency can be stolen and used by anyone, and paper checks are inefficient.

My personal experience with this phenomenon was at the Atlanta Olympics where MasterCard was testing a smart cash card. It was very convenient. Every retailer participating in the test had a small reader, similar to a credit card scanner, through which you ran your smart card. It would show your total and how much the item cost. You would then agree or disagree to purchase the item and the remaining balance would be shown. Easy.

How can you be prepared for this paperless future? First, it is wise to find out about the systems and options that will be available.

Smart Cards

The major players currently are Visa, MasterCard (working together to set the standards), Bull, IBM, and Schlumberger.

* Schlumberger (http://www.slb.com/smartcards/) offers a whole set of options and features within their "Smart Village" concept of smart card use. They provide an abundance of information on smart cards and the variety of areas that could be influenced by smart card development including payphones, parking, banking, and electronic purses.

* Bull (http://www.cp8.bull.net/), a company based in Paris, France, is leading the development of smart card systems throughout Europe and the world. They focus primarily on their products and services with only a small amount of information on what a smart card is and on standardization developments.

* IBM (http://www.chipcard.ibm.com/) is one of several companies linking smart cards to the Java programming language. They provide a selection of brochures on smart card usage and development including a Smart Card Redhook available full-text online. An abundance of other information is available as well. Of particular interest is a section on current smart card uses.

* Visa (http://www.visa.com/cgi-bin/vee/nt/chip/main.html ?2+0) provides answers to several standard questions regarding smart cards. The site also provides information on VISA Cash, a stored value card system.

* Mastercard (http://www.mastercard.com/smartcard/) and its electronic cash subsidiary Mondex (http://www.mondex.com/) provide a plethora of information on their products. An extensive FAQ list, a newswire section, and a multimedia tour of a smart card in action are just some of the resources available here.

Along with this concept of the smart card for transactions is also the burgeoning field of electronic cash. The impact on the Internet could be great if these systems succeed. The most interesting concept being discussed is the concept of micropayments where your browser or computer is loaded with a certain amount of electronic cash. As you surf the Net, sites that require payment will automatically deduct the amount from your electronic cash purse. The payments would be incredibly small - perhaps a few pennies or less. This creates a situation where the user does not perceive a significant cost, but the web site owner sees a significant inflow of money from the gross number of visitors. Would you be willing to pay a few pennies per page to view certain sites? Many companies are banking on it.

Electronic Cash

In addition to Mondex (mentioned above) there are several players in the electronic cash industry.

* Cybercash (http://www.cybercash.com/) offers an array of payment options including CyberCoin, SET, credit card, and others. Especially useful is the Micropayments 101 for a simple explanation of what micropayments actually are.

* Digicash (http://www.digicash.com/) has the e-cash product being used in Europe and Australia. An abundance of information is available for users and merchants as well as on the issuers of the e-cash currency.

* Millicent (http://www.millicent.digital.com/) is the Digital (now Compaq) product for micropayments over the Internet. It is currently in beta testing, so this site allows a visitor to download the wallet and obtain $10.00 of free 'scrip' to test the new system. Take the future for a test drive by visiting a variety of vendors involved in the test.

More Info

If the above sites on electronic commerce, electronic cash, and smart cards has piqued your interest, then there are several worthwhile sites to visit for more information.

* Leo Van Hove has compiled (with a little help from friends) a massive bibliography of e-wallet and e-cash sources in print and electronic format. This bibliography has been growing since June 1996. The URL is http://cfec.vub.ac.be/cfec/purses.htm. Internal links are available to resources on specific 'purses' and to country-specific information.

* Abrac@dabra (http://www.netlink.co.uk/users/abracad/emoney.html) is a UK-based site that provides a quick overview to emoney and a selection of relevant links. The most useful part of this site are the selections of links on the topics of Skeptics, Tax Dodging, and Key Essays and Articles.

* The National Technological University of Singapore (http://www.ntu.edu.sg/library/advrtise.htm) has compiled another massive list of web-based resources. The focus of the list is much broader and encompasses advertising, marketing, and electronic commerce as a whole. Numerous links to vendors and full-text articles are provided within this list.

* CNET conducted a comparison of the available e-cash options back in 1996. This article (http://www.cnet.com/Content/Reviews/Compare/Ecash/index.html) is still available and can provide a solid foundation for research into this developing area. Items that are especially useful are the "How E-cash Works" and "Future Watch."

* The magazine Wired also focused on e-cash in mid-1996 in there article "The Buck Starts Here: Will Nanobucks be the Next Big Thing, or are We Just Talking Pocket Change?" (http://www.wired.com/wired/archive/4.08/nanobucks.html) This is a very interesting and perhaps sobering article explaining there are still many bugs to be worked out if this concept of micropayments is to succeed. While it is a bit dated, it provides a good foundation for where this industry has developed from in the past. Several related articles are also available with Wired's usual cynical focus on the reality beyond the hype.

Electronic payments and electronic cash are the future. Corporations with visions of big money and constant, invisible charges for everything on the web will see to it that the security and stability issues are overcome. Electronic payment schemes such as these can be used in many library functions: acquisitions, serials payments, overdue fines, internal corporate billing, just to name a few. It would be best for special librarians to research this future now so we can make informed decisions later.

Hal P. Kirkwood Jr. is assistant management & economics librarian, Purdue University, West Lafayette, IN. He can be reached via e-mail at Kirkwood@purdue.edu or http://www.geocities.com/CollegePark/Union/7290/. For more information on On the Net, contact Sharyn Ladner (sladner@miami.edu).

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