It took the U.S. Postal Service 20 years to develop a mechanical postage meter. But at least one company expects to introduce Internet postage stamps by 1998.
E-Stamp, which has been working on an Internet stamp geared toward the small-office/home-office (SOHO) market for three years, is one of several vendors that the Postal Service expects to line up for approval to issue Net stamps, according to Sandra Harding, a spokeswoman for the Postal Service.
Last year, the Postal Service proposed standards that it hoped would be used by private companies to develop Internet stamps, Harding said. The stamps would contain two-dimensional, printable bar codes with encrypted information and would be issued through secure Web sites.
She expects several companies to submit proposals, adding that the Postal Service will likely give approval to more than one company.
For the Postal Service, Net stamps could prove to be extremely lucrative because they would be geared toward small business users, a relatively untapped market.
"The SOHO market is a new market that we want to reach," Harding said. "We think [the new stamp] is going to make [buying postage] very convenient and easy."
For private companies developing the stamp, contracts with the Postal Service would prove equally lucrative.
E-Stamp's revenue model includes making money by licensing software and hardware for the new stamps, selling a subscription service, and charging a transaction fee, according to Sunir Kapoor, president of E-Stamp.
The E-Stamp plan calls for a software and hardware combination that will allow users to purchase postage over the Internet using a variety of secure payment options. The stamps are then stored in an "electronic vault" about the diameter of a dime and about three times as thick. The software then prints the stamps on a variety of different products, including envelopes, shipping documents, and labels.
Harding noted the Postal Service is currently reviewing the E-Stamp proposal to see if it meets the rigorous security standards. She could not give a timeline for the new stamps, but did say "we want to make it happen as soon as possible." More important than speed is security, she added. "We want to make sure it's secure."
Kapoor, however, hopes to be first. His company has been working with the Postal Service all along and ahead of anyone else in developing a product that meets the standards, he said.
In fact, he is so sure that his company's product will be approved that he's counting on the first stamps to be available by the end of the year.