Electronic payments company Digicash NV has teamed with Internet provider EUnet Ltd to offer a system that enables users to make payments over the Internet. The new technology gives small payments of a few cents the same security as large value transactions have, the companies said. Customers do not have to pay any extra to use the electronic cash service, but merchants are charged a 2% levy. The system is being launched in Finland because it has one of the highest number of Internet connections per person. EUnet will be working with major banks, and intends to roll the service out to more of the 41 countries it operates in this year, but it did not specify which countries. Digicash already has an agreement with Mark Twain Bank in the US that enables both US and non-US customers to open an electronic cash account and spend over the Internet. Finnish bank Merita Oy will enable users to visit a virtual teller machine on the Web and withdraw money from their account into their electronic cash purse. With this money they can make electronic payments to each other as well as to on-line merchants. Special encryption envelopes Users first authenticate their ownership of the account, then request the amount to withdraw, which is stored on the hard disk. To make a payment, the user confirms the amount and payee and the electronic cash software transfers the correct amount. The user’s personal computer creates ‘serial’ numbers for the electronic coins at random. It hides these in special encryption envelopes, sends them to the electronic bank for signature and when they are returned, removes the envelopes while retaining the bank’s validating digital signature on the ‘serial’ numbers. This way, when the bank receives the coins the user spends, it cannot recognize them as coming from any particular withdrawal because they were hidden from the bank by the envelopes during the withdrawal process. The bank cannot know when or where the user spends the money. The number of each signed coin is unique, enabling the bank to ensure that it never accepts the same coin twice. EUnet now plans to introduce a service that enables users traveling anywhere in Europe to dial a local telephone number and pay for Internet access via EUnet Traveller, using electronic cash. Current merchants include SOM, the Finnish Securities and Derivatives Exchange and Clearing House that is offering real-time financial market information on shares, options and futures, with invoices payable in electronic cash. This service is already available via leased line. Finland’s youth publication City Magazine will accept electronic cash for the payment of classified advertisements for both its paper and on-line versions as will the Keltainen Porsi newspaper. Yomi Media Ltd has a virtual shop selling telephone accessories and the MTV3 television channel is offering real-time shopping for customers using electronic cash on its Web site at http://www.mtv3.fi.
