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IP: Going Cashless: Bank ends ECash trial period
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Date: Sat, 19 Sep 1998 07:47:55 -0500
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Subject: IP: Going Cashless: Bank ends ECash trial period
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Source: ComputerWorld
http://www.computerworld.com/home/news.nsf/all/9809174ecash
(Online News, 09/17/98 12:16 PM)
Bank ends electronic cash trial
By Mary Lisbeth D'Amico
The sole U.S. bank to show interest in online payment via electronic cash
this week abruptly ended its three-year trial of DigiCash, Inc.'s ECash
software.
Citing a new strategy and market conditions, St. Louis-based Mercantile
Bank this week ended a trial that allowed customers to make purchases over
the Internet with electronic coins, Mercantile spokeswoman Beth Fagen
confirmed.
The trial used ECash, an electronic cash software program created by Palo
Alto, Calif.-based DigiCash. The bank was the sole U.S. client for
DigiCash, which hopes to have another major U.S. trial in place by year's
end, according to William Donahoo, DigiCash's vice president of business
development.
The trial brought together 5,000 customers with 300 Internet merchants.
Customers gave the bank their credit-card information only once, then
created electronic "coins" at the bank, allowing them to make small
purchases -- or micropayments -- of goods over the Internet without having
to enter a credit-card number each time. The buyer also remains anonymous
to the merchant because the coins don't identify the customer.
Mercantile inherited the ECash project when it purchased Mark Twain Bank
in 1997, Fagen said. After reviewing its strategy, the bank decided to call
a halt to the trial after it became apparent that few of the project's
participants were Mercantile's core customers in the six Midwestern states
where it operates, she explained.
Fagen also cited the changing climate in the U.S. for Internet payments.
When the trial was started in 1995, she said, "people were more fearful of
using credit cards to pay for things over the Internet. Now that seems to
have disappeared."
Although Mark Twain was the first bank worldwide to try out ECash, its
core business never was quite a match for the product, according to Donahoo.
"But we are still bullish about our prospects for this market," Donahoo
said, pointing out that automated teller machines took nearly 20 years to
gain favor with consumers. DigiCash will concentrate on finding the right
type of merchants for its U.S.-based projects, he said.
In Europe, DigiCash has ECash projects in progress at Credit Suisse, the
Bank of Austria and Deutsche Bank.
Copyright � 1998 Computerworld, Inc.
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Robert A. Hettinga <mailto: [email protected]>
Philodox Financial Technology Evangelism <http://www.philodox.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'