Word: cybercash
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Dates: during 1996-1996
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This week CyberCash, based in Reston, Virginia, launches a product that could change all that, and turn the Web into one giant vending machine. The company's CyberCoin system will allow online "microtransactions" of as little as a quarter. "We think," says an exuberant Larry Gilbert, CyberCash's vice president and general manager, "it's going to be the core of electronic commerce on the Internet...
Here's how the system works: starting this week, you'll visit the CyberCash Web site, download an empty electronic wallet onto your hard drive and register it with the company (if your own bank signs up with CyberCash, it will offer you its own self-named wallet). The software acts like an ATM, allowing you to transfer $20 to $100 from your bank into your wallet before heading off onto the Web. When you reach a site that accepts CyberCash, you can spend your money by using either your credit card or CyberCoins...
That's music to CyberCash, whose revenue will come from usage fees, just like those of credit-card issuers. "On a 25[cents] transaction," says Gilbert, "we'll charge the bank 6[cents], and they'll charge the merchant 8[cents]." As transaction sizes go up, they'll get a much smaller percentage; still, over millions of users, CyberCoin profits could add up to big bucks...
Inevitably, the company will have company. CyberCash launches CyberCoins with a respectable roster of partners: some 30 Web hosting companies will offer CyberCash to their client sites, and by year's end CyberCash expects about 100 Web sites to take them up on it. Initially six banks will offer electronic wallets to their customers, including the Charlotte, North Carolina-based First Union, the nation's sixth largest. "There's an obvious niche for 'coin' payments on the Internet," says Parker Foley, First Union's director of electronic commerce. "CyberCash is the first company to have their model together...