A consumer with a Wave System CreditChip account would be able to use an ATM-like interface to fund the account with credit from any major credit card. Once funded, the account would automatically monitor and deduct money for any online transaction, whether the user downloads new software, uses a pay-per-use Java applet, plays a game online, or subscribes to an online publication.
The system is built around Wave's proprietary WaveMeter semiconductor and encryption technology. The company today released a development kit that would let computer manufacturers build the chip into the systems, but so far no one has come forth to endorse the new chip.
Still, according to Wave officials, the chip-based system has advantages over other electronic commerce schemes because CreditChip account holders don't need to use a password for each transaction or provide credit card information to individual vendors. Instead, this information is given only to the First USA Paymentech service that Wave has signed on to do the behind-the-scenes transaction processing for all CreditChip accounts. The system can also print a single report logging all transactions.
"A new user adds $75 to his or her account with a major credit card via a modem link with our back office," said Paul Torchia, vice president of Wave Systems' WaveNet division that developed the system. "The consumer is then free to purchase news, read a magazine article, play games, rent software, and so on, all with only a click of a mouse, until the $75 has been utilized."