Ray Van Eng (05/19/97)                     

Electronic wallet (e-wallet), digital certificates or digital IDs, the secure electronic transactions (SET) protocol, electronic commerce and all that technoblabo have left many consumers cold and confused.

"Do I have to know all these to do a little shopping on the Internet?", you asked.

No, you don't.

But understanding how the different pieces fit together will help make you realize all that technology is really there to make your life easier and offers a degree of protection against credit card fraud that is not even possible with today's real world transactions like using our credit cards to pay for dinners or call a 1-800 number to buy something through mail order.

Visa and Mastercard have done some important groundwork with their SET protocol in terms of how an Internet financial transaction should behave between the consumer, the merchant and the credit card issuing bank.

However, central to SET are two major components that have yet to be fully developed: e-wallet technology and digital ID services.

E-wallet is a piece of software that plugs into popular browsers such as the Netscape Navigator and the Microsoft Internet Explorer. When a consumer is ready to make a purchase from an Internet merchant, he/she can simply selects the method of payment by clicking on one of the on-screen icons that could represent a credit card: Visa, Mastercard, Amex or others, or a special arrangement with a payment processor: First Virtual, CyberCash, Checkfree etc.

E-wallet is designed to represent what Internet commerce is all about for consumers: an intuitive interface that offers utmost simplicity for the person who spend the bucks and make the whole venture a viable business opportunity in the first place.

The technology hides the complexity of a financial transaction from the consumer who will work from a familiar desktop browser environment and only needs to point and click his/her way to facilitate payment during an Internet shopping spree. The underlying technology, be it SET, PIN (personal identification number), EFT (electronic fund transfers) and the likely use of smart cards and debit cards in the future will all be executed seamlessly in the background.

There are a number of companies offering free e-wallet software for the consumers. Microsoft, Verifone, Checkfree and CyberCash allow anyone interested in purchasing over the Internet to get his/her wallet software by downloading it from the vendors' respective web sites.

Both Microsoft and Netscape have publicly stated that future versions of their browsers will have e-wallets built-in. With Microsoft, the technology would even become an integral part of future Windows operating systems.

Next page - Part 2 Digital IDs