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PSINet joins commercial trend

PSINet joins the scramble of Net access companies adding electronic services by offering to sell businesses' products on the Net through its PSIWeb.

PSINet (PSIX) today is offering an e-commerce service for businesses to sell their products on the Net through PSIWeb, its Web hosting service.

PSINet, an Internet service provider targeted at businesses, joins the scramble of Net access companies adding back-end electronic services. Yesterday AT&T (T) unveiled similar services for would-be Web merchants. Even FedEx announced a software bundling deal today to let companies use the Net for selling merchandise (see related story).

These kinds of announcements can expected to become increasingly common as ISPs face a declining price spiral for their Net access services. As more players jump into the ISP pen, most feel obligated to at least match the going rate of $19.95 per month, and some may even start undercutting it. Since many ISPs already find it hard to stay profitable at that price level, those who can afford to will branch out into e-commerce to provide a new potential revenue stream.

Web hosting services like PSIWeb, in particular, can be expected to add more back-end services because they already have the bulk of the hardware required for processing e-commerce transactions.

PSIWeb eCommerce creates, integrates, and manages virtual storefronts for merchants who want to conduct commerce on the Internet without investing heavily in hardware and communications. Merchants control content and administration of their storefront.

The service integrates the secure payment system of CyberCash to process credit card transactions and SoftCart virtual store technology from Mercantec.

The CyberCash payment system includes an electronic "wallet" for consumers, an electronic "cash register" for merchants, and a gateway service connected to existing bank networks for handling transactions.

SoftCart allows developers to create a complete shopping environment that so that they can browse online and pay for purchases using secure payment methods such as CyberCash. SoftCart tracks purchases, creates invoices, calculates shipping and sales tax, and delivers completed orders directly to accounting systems.

The complete PSIWeb eCommerce service includes Web hosting services and costs $295 per month, below AT&T's $395 to $595 per month pricing. The PSIWeb eCommerce payment-only service with CyberCash costs $195 per month.

William Schrader, PSINet's chairman, president, and CEO, said that "1997 will be considered the year that 'eCom' came of age, taking over where EDI (electronic data interchange) left off, and solving the security, privacy, and intellectual property issues which have been debated for the first part of the decade."