The Outlook for Digital-Cash Systems

Given the variety of approaches in the six systems examined here, network merchants have a lot of payment-service options. Which ones will thrive--or even survive? Here are a few predictions.

--  Servers will accept a variety of payment methods. (Translation: They'll
    take your money any way they can get it.)

--  WWW browsers with built in public-key signatures will be used. Encryption
    and digital signatures are needed, but dedicated payment software has a
    firewall problem. There will be a steady increase in password-capturing
    software.

--  Credit-card companies will begin using network payments in a big way.
    Their operations are global, and they already have you signed up. Thes
e
    companies will eventually offer corporate billing and debit transactions,
    as well as consumer credit billing. Right now, they're just biding their
    time, hoping to get their systems right the first time.

--  Digital-cash rollouts will be slow. A major security flaw in many
    digital-cash schemes, including E-cash, is that somebody who embezzles
    a bank's private key can create counterfeit cash. The cost of this would
    probably be borne by the bank. Of course, this prospect makes banks
    extremely wary.

--  It will be quite a while before payment services make money. At a
    1 percent margin after clearing, BYTE estimates that each service
    will have to process $200 million per year--far more than the total
    volume for 1994--to support a data center and customer-service operation.

--  Time-sharing will make a comeback. Why bother to buy, install, and
    maintain a complex application when you can just attach and go? Rent,
    don't buy; do it from your laptop
. Payment services will support an
    explosion in creative new information services.