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If the Internet is the great, wild frontier, then the companies trying to develop ways to conduct safe transactions there are the pioneers that will tame it.

As interactive TV lags farther and farther behind, the Internet, a global collection of connected computer networks, is taking up more and more of the spotlight. By one estimation, 75% of the businesses on the 'net weren't there two months ago, and they didn't go there to be passive information providers.

"With 500 channels, you're just a consumer. But with [electronic commerce] on the Internet, you're in a global flea market," said David Chaum, managing director of Digicash, one of several companies developing electronic transaction systems.

"Everybody and their sister is going to be selling some articles they wrote, some cookie recipes they made up ... some advice on restaurants in Seattle they know of-and that's going to make the Internet more appealing to average users."

For now, the Internet is nowhere near that vision. Transactions are few and far between-and highly risky. Marketers that want to sell products and services there often are resigned to using a much less high-tech tool: the telephone.

And while conducting transactions using credit cards or "digital" cash may be a dream come true for marketers, getting there is likely to be a nightmare.

Unlike commercial online services such as Prodigy or America Online, the Internet is not a closed system.

Because no one company runs the Internet, there are numerous competing and conflicting plans to develop transaction systems. And because the Internet links disparate computers and networks with varying standards and capabilities, whatever system is developed must be capable of overcoming those obstacles.

Marketers on the Internet make no bones about the need for transaction software. But their excitement is tempered by concern.

"One of the things that we want to be sure of is security, so that's been holding us back," said Michelle Ferguson, a spokeswoman for Mammoth Records, which operates an Internet site promoting alternative artists like Juliana Hatfield and Frente. "We have been waiting for something we feel offers the best credit card encryption."

In the meantime, Mammoth takes orders via phone (

The same is true for Contentware, whose Shopping2000 Internet product ( includes catalogs from Tower Records, Spiegel and others.

"Seamless, real-time handing off of orders and credit checks and order processing ... that's where the industry hits the wall right now," said Contentware President Kenneth Koppel.

"The challenge for electronic commerce is creating standards," said John Houston, director of strategic consulting at Modem Media, a Westport, Conn., agency that has helped put AT&T and Coors Brewing Co. on the Internet, among others. "There are some stop-gap solutions in the interim, [but] longer-term solutions will take several years to develop."

There's no lack of companies hoping to fill that need, either. They range from entrepreneurial startups to Internet "browser" suppliers-companies whose software makes navigating the Internet easier.

"The emergence of the Internet, interest in electronic business and increasingly affordable computer technology will converge," said Jim Clark, chairman-CEO of Netscape Communications Corp., a Mountain View, Calif.-based start-up marketing a commercial version of the Mosaic software for cruising the Internet.

"The paradigm of [Netscape] is a way for you to instantly electronically connect with today something like four million users ... growing to 10 million by the middle of next year, and probably 50 million by the year or two after that," Mr. Clark predicted. "It is the electronic marketplace. If you've got 10 million users, each doing $100 of electronic activity a year, you've got a billion-dollar business. Eventually, tens of billions of dollars a year."

One of the first uses of Netscape transaction software may come next month. Bank of America plans to offer marketers the ability to conduct commerce-provided they use Netscape servers and send payments through Bank of America.

Spry, a Seattle-based software company, has already released AIRMosaic, a new World Wide Web browser that supports a variety of tough encryption schemes designed to enable companies to offer products and services for sale on the Net. Spry foresees that early users will include software companies, online publishers and information vendors.

Spry is testing the product's security by allowing users to order the software directly from Spry over the Internet and pay for it with a credit card.

Another Mosaic supplier, Spyglass, Naperville, Ill., will introduce in the first quarter of next year an enhanced version of its browser allowing Internet users to perform transactions.

While such software will provide the framework for safe shopping, other entrepreneurs are developing transaction tools to make doing deals a reality.

David Chaum, inventor and managing director of Amsterdam-based Digicash, has been touring the world, introducing bankers to his electronic-cash system, intended to offer security and anonymity to consumers and retailers in cyberspace.

Consumers will be able to download the software free on the Internet, register their credit card number and password online, then download cash from their credit card onto their hard drive, where it will be protected by password from hackers.

Mr. Chaum expects early adopters will be small merchants and software houses and restaurants that deliver.

"The niche for electronic money is primarily for low-value purchases," he said. "It isn't cost-effective for small dealers to take such a small sum by credit card because of the individual transaction surcharges imposed by credit card companies."

Twenty-five companies, including Encyclopaedia Brittanica and The Weekly Mail & Guardian, a South African newspaper, are participating in a test of the system, with a launch expected in the first quarter.

One company already has the backing of some of the biggest high-tech marketers in the world. CyberCash, a start-up company based in Reston, Va., is introducing a system that will allow consumers to purchase items on the 'net with a credit card or by near-instantaneous debit of their bank accounts.

The system's flexibility and conformity with existing banking standards for data transfer make it an early favorite to gain crucial support from the banking industry; last week, Wells Fargo Bank said it would work with CyberCash to develop secure Internet payment services.

CyberCash will be used by the companies involved in CommerceNet, a consortium of banks and high-tech marketers now setting up a business-to-business electronic commerce network.

The system will also work with World Wide Web browsers on consumer PCs. Software will be available free for downloading starting in the first quarter of next year.

"We're providing the seamless gateway between the banking networks and the Internet," said Bruce Wilson, Cybercash's chief operating officer. "We'll have the payments gateway at a very low price, trusted by the banks. We're compatible with everybody. CyberCash is an open system."

CyberCash may also be helped by familiarity. The company is closely affiliated with Verifone, supplier of 80% of the U.S.' point-of-purchase credit card swipe terminals in grocery stores and other retailers.

One company claims it can bypass entirely having to send confidential information over the Internet.

First Virtual Holdings, Cheyenne, Wy., simply takes a customer's credit card information over the telephone. Consumers wanting to buy a product on the Internet must send an e-mail message to First Virtual. First Virtual verifies the consumer's credit and notifies the merchant of the purchase. The merchant handles delivery.

The company has been testing the system since October and plans to start a rollout in February with 50 merchants.

"First Virtual made a decision ... to develop a system of moving money that was integrated with the existing banking and credit world rather than create a new, electronic currency," said CEO Lee Stein. "We think there is no worldwide standard of encryption ... and we see that as an impediment to commerce."

Among the companies testing the system are Internet Info, a Fall Church, Va., research company; publisher Lemon Tree Press; and Internet Multicasting Service, a data distribution service. For the moment, the merchants are selling only information, but starting in February the system will expand to actual merchandise.

Another system, developed in Europe, hopes to become the digital cash source not only for the Internet but for any interactive transaction.

Mondex, a product of National Westminster Bank, lets users carry up to $1,000 in a digital "purse." Consumers can exchange currencies in moments over any phone line, exchange Mondex dollars, or yen, or francs, with one another, or with merchants, with complete anonymity.

"Mondex may not be the only way of paying for information highway services, but I think it's an important way," said Tim Jones, co-inventor and CEO.

Mondex plans to test its system this spring in Swindon, England. Participating retailers include BP Oil UK; Laura Ashley; McDonald's Corp.; Mobil Oil Corp.; Sears, Roebuck & Co.; and a host of others.

No one should expect widespread use of electronic cash for three or four years at least, even if today's tests and tomorrow's new software and electronic commerce systems appear on time and in good running order. But for those who introduce standards that stick, the rewards could be enormous.

"You don't need to get to consumer needs," said Mark Gordon, head of marketing at Mondex. "A very articulate market says we want digital cash so we can market products and services on the 'net. End of story."

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