The UK is not leaving all the running to the US in the development of internet payment software. This week’s Red Herring Venture Markets Europe forum in London saw a presentation by Edinburgh start-up Intertrader of an open standard internet cash payment system. Intertrader is looking for a 1999 release for its Intertrader Payment System which has three components – the CashBox, NetPOS and Wallet. The company, which has won several prestigious awards for its work-in-progress, is headed by chief executive Rachel Wilmer, previously responsible for product development at Spider Systems, now part of Shiva Corp.
By Beatrice Arnfield
Online cash is not to be confused with internet credit cards, where a third party is providing and charging for credit. In the system envisaged by Intertrader, payment of online cash is immediate, with money passing from a purchaser to the merchant without the use of credit. With the use of appropriate software, this type of transaction can be as anonymous as the use of cash in the real world. We’re not saying credit cards are doomed, Wilmer told an audience of venture capitalists at Venture Markets Europe. Cash is a different type of application and the one we are concentrating on at the moment. Eventually our software will cater for credit as well as cash. According to Visa International, in the real world $1.8 trillion changes hand each year in transactions worth less than $10. If it is to become a mass market, the internet will have to offer facilities for such transactions, Intertrader argues. This is particularly the case with low-value information goods and services for which the payment of a transaction charge would be disproportionately expensive.
Low processing costs
Digital cash schemes with no central accounting system have very low processing costs and are suitable for low-value payments. For example, accessing a web site, reading an electronic newspaper, playing online games or accessing a specialized search engine or database. Further uses of online cash might be within businesses where exact charges can be made for the use of common services such as photocopying, printing and e-mail. Intertrader’s software is being developed as an open system which can work with different types of digital cash, even allowing them to inter-operate. We’re not trying to create a new brand, says Wilmer, we’re providing a uniform interface into all types of technology, so that existing smart card developers such as Mondex, Proton and VisaCash will be able to use our software to enhance their own technology. Our system will be one element in the value chain of digital cash.
Server side
Most of Intertrader’s revenues so far have come from its server side software, with wallet technology being developed out of necessity. The difference between the Intertrader and Microsoft wallets is that while the Microsoft wallet is a store for credit card information, the Intertrader wallet is transactional. Intertrader has not released sales figures, although it is expecting to go into profit in the first quarter of 1999. Its most impressive achievement to date is the number of grants it has attracted, including a SMART award from the UK government. With total venture capital raised to date of just $0.2m, Intertrader is still at the seed/start-up stage. Its strength, according to Willmer, lies in its concentration on developing an open system to support e-cash on the internet.
