Re: Going Cashless: Bank ends ECash trial period

["Thomas Junker" <tjunker@phoenix.net>]

Paul Gillin
Editor in Chief
Computerworld

Dear Paul:

The Computerworld article in Online News, 09/17/98 12:16 PM,

	Bank ends electronic cash trial
		By Mary Lisbeth D'Amico

	http://www.computerworld.com/home/news.nsf/all/9809174ecash

is a good example of today's low standards in journalistic accuracy.  
Ms. D'Amico failed utterly to comprehend what Mark Twain Bank's 
Digicash program was.  She wrote:

    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. 

Ms. D'Amico evidently confused the Digicash program with other, 
dissimilar Internet transaction mechanisms that are substitutes for 
passing credit card information over the public Internet.  In fact, 
the Digicash program HAS NOTHING TO DO WITH CREDIT CARDS OR CREDIT 
PURCHASES.  Is that clear enough?  Digicash provided the means to 
move money on deposit with Mark Twain Bank into an electronic 
"purse," from which it could be spent with merchants equipped with 
Digicash software.  No credit.  No credit cards.  No necessarily 
"small" purchases.

Ms. D'Amico's profound leap of misunderstanding misinforms and 
misleads readers.  It also rather completely vacates the presumably 
explanatory comment she attributes to the Bank's new owner's 
representative, Beth Fagen:

    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." 

Had Ms. D'Amico understood the nature of Digicash, she may have 
questioned Ms. Fagen about the apparent non sequitur.  If Digicash 
had nothing to do with making credit transactions "safer," why would 
decreasing public fear of using credit cards on the Internet have 
anything to do with Mercantile's decision to abruptly discontinue the 
Digicash program?

The key fact completely overlooked, the one thing that distinguished 
the Digicash program from all the look-alike credit-card protection 
schemes, was the anonymity of the purchaser.  Ms. D'Amico mentions it 
in passing as if it were merely a curiosity.  In this increasingly 
fishbowl world, online purchases, particularly of intangibles such as 
information, are subject to tracking and record keeping that is 
clearly, demonstrably, becoming a danger to the privacy and well-
being of the online public.  It is to be expected that products and 
services such as offered by Digicash will find an increasingly 
enthusiastic market as the private and governmental abuses of 
information gathered on line become more widespread and more widely 
known.

Digicash, by the way, was never considered a true "micropayment" 
system.  Micropayment refers to the facility of trivially making and 
accepting payments as small as 1/100th, even 1/1,000th of one cent.  
No such systems have yet been fielded, and no credit card system can 
come anywhere close to the low transaction cost required to permit 
micropayments for access to Web pages, articles, or the use of minor 
online services such as HTML verifiers, graphic button builders, etc. 
It is only a matter of time before such systems become available, and 
they will likely be both anonymous and unrelated to credit cards.  
Ms. D'Amico will no doubt report the advent of such systems as yet 
another advance in the use of credit cards on the Internet.

But then, Computerworld is the outfit that used to heavily promote 
the idea of trade unions for programmers and data entry clerks, the 
"Certified Data Processor" program, and trumpeted the release of 
virtual memory by IBM some ten years after it had been fielded by 
Burroughs Corp.  Mitigating that last, the same issue of 
Computerworld carried a small, back-pages article about Burroughs' 
virtual memory, with a picture of staff at a B-5000 site celebrating 
the anniversary with a birthday cake bearing ten candles.

Regards,

Thomas Junker
tjunker@phoenix.net

http://www.phoenix.net/~tjunker/wang.html
The Unofficial Wang VS Information Center