CyberCash's new electronic coin service, CyberCoin, enables cash transactions of 25 cents to $10 on the Net. Until now, the merchant's cost of handling low-priced purchases made with credit cards was so high that low-value credit-card sales were not economical for retailers.
"CyberCoin fulfills a growing need for consumers to purchase lower-priced and 'impulse' items on the Internet, especially digital goods and services that can be instantaneously downloaded to your computer, such as software, articles, research, games, and music," CyberCash CEO Bill Melton said.
The CyberCoin announcement came at the American Bankers Association convention in Orlando, Florida, today, which generated a variety of electronic payment news. VeriFone announced its smart card scheme; Netscape Communications announced availability of its Live Payment server software to handle credit card transactions securely; and Microsoft announced a new version of its personal finance software, Money 97, as well as partnerships for online banking.
CyberCoin will compete with two other firms offering micropayments. A Dutch firm called Digicash is running a pilot with Mark Twain Bank of St. Louis. First Virtual Holdings has more than 100,000 users signed up for its service, which combines email and credit card payments but keeps credit card numbers off the Net.
Free to consumers, CyberCoin adds a form of payment to an Internet Wallet, available from CyberCash's Web site, its bank partners, and CompuServe's Internet in a Box packaged software. CyberCash is working with Sun Microsystems on Sun's "Java wallet" that will accept CyberCash and other payments.
Wallet technology is expected to be built into Web browsers, but neither Netscape nor Microsoft has announced a wallet relationship with CyberCash. CyberCash last week signed an agreement with Mondex International to integrate Mondex's smart card technology into the CyberCash Wallet.
CyberCash expects to release "electronic checks," a form of payment that doesn't go through a bank, by year's end.
CyberCash will work with banks to integrate the CyberCoin technology and services into the banks' Internet offerings for both merchants and consumers. Banks can offer the CyberCoin service to online merchants and provide back-end processing and access to existing financial networks.
Merchants will pay banks a per-transaction fee for the CyberCoin service, ranging from 8 cents on a 25-cent transaction to 31 cents for a $10 purchase. CyberCash, which initially will handle the entire transaction for banks, gets 75 percent of that fee, while the bank gets 25 percent.
CyberCoin is available now for banks, merchants, and consumers. First Union, First USA Paymentech, First Data and its affiliated banks, and Michigan National Bank have already committed to offer or pilot the CyberCoin service this year.
Merchant server software is available immediately from CyberCash for Windows NT, Solaris, and BSDI, with other versions available by the year's end.