CyberCash Inc and First Virtual Holdings Inc have signed a strategic agreement whereby First Virtual will hand off all its 2,000 merchants that use its First Virtual internet payment system (IPS) to CyberCash, offering them a migration path to CyberCash’s CashRegister payment service. The move signals First Virtual’s departure from the internet payment service business and from next month it will concentrate on its interactive messaging platform. Last week First Virtual announced its acquisition of Email Publishing Inc, a provider of message delivery and email subscription management services. Terms of the deal were not disclosed, but it seems clear that CyberCash was the one handing the money. CyberCash has established a special ‘welcoming’ web site for the First Virtual merchants and the latter has established a site with a link to begin registering them for CyberCash’s service. Softbank Corp’s Softbank Technology Ventures holds a 64% stake in First Virtual and is the second largest shareholder in CyberCash, with about 8%. Having Softbank on both boards made board approval easier said First Virtual president Keith Kendrick, but he emphasized that this deal was certainly not a prerequisite of Softbank buying its stake in the company, and First Virtual announced its intention to concentrate on messaging towards the end of last year. First Virtual will also encourage the 60,000 or so buyers that use its technology to move over to CashRegister. These are individuals that signed up for a Virtual PIN with First Virtual to enable credit card transactions, and the company says that the figure is only a subset representing those individuals that have been active in the past six months. In return, CyberCash will recommend First Virtual messaging platform as its preferred interactive messaging technology. Merchants and customers heard about the news Monday evening and Kendrick said that a final tally has not been done to determine how much – if any – overlap there is between the two merchant bases, but he said that the vast majority have been exclusive, based on initial estimates. The next version of CyberCash’s service is due in about a month and the next cut of the merchant connector kit is due within 8 weeks, according to the company. First Virtual, founded in 1994 was one of the first internet payment companies, as was for that matter, CyberCash. There were numerous rumors flying around yesterday about CyberCash being bought by IBM, Microsoft and a few other companies. CyberCash wouldn’t comment but similar rumors about the company have previously come to nothing.
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