Electronic commerce has moved closer to home with separate announcements from Microsoft, CyberCash and Verifone that will enable people to do their banking and buying over the Internet. "These bring a lot of technologies that have been floating around out there right down to the consumer's desktop," says Scott Smith, group director of digital commerce at Jupiter Communications in New York. "It knocks out having to go stand in the teller line. That's the only thing banks haven't been able to get rid of."
Although an adjustment period is anticipated for users who are used to handling cash and coins, the developments are expected to help spur online banking which took off in Europe even before the Internet became so widespread, analysts say. "Europe has been doing electronic banking for years. New and enabling technology via the Internet using a browser and Internet applications is the next step for those guys," says Carl Lehmann, programme director at Meta Group in Boston. "Their next evolution is not so much the technology, but broader-based capabilities. Right now, the US is just getting introduced to the technology."
Microsoft announced Money 97, a new version of its personal finance software that uses the Open Financial Connectivity specification. It enables bill paying, account balancing, access to bank and financial institution online services and also updates users' stock portfolios.
In a cross-punch to Intuit's popular Quicken money management software, Money 97 also has a tool for converting Quicken data. Microsoft is offering US$10 to Quicken users if they switch to Money 97. "This is long overdue. Microsoft is behind Intuit across the board," Lehmann says of Money 97. Now, Microsoft needs to offer low-end software for the less sophisticated financial software users, to compete with Intuit's BankNow, he says.
A rival to Intuit on the low-end, according to Lehmann, will be Verifone, which has announced its Personal ATM for adding electronic funds to smart cards using a modem and telephone line. A palm-sized smart card reader and writer will have an interface with Verifone's vWallet and other stored value cards so users can make purchases and other online transactions.
Smart cards, which have embedded chips that contain financial and other information, are expected to replace magnetic strip cards that are used to access computer-stored information. "It's one more piece of the smart card infrastructure that's trying to give birth in this country," says Torrey Byles, director of electronic commerce research at Giga Information Group in Santa Clara, California. "It remains to be seen how successful it will be ... but there's a feeling in the air that there may be a more rapid uptake now than in the past due to the success of the Internet."
Meanwhile, CyberCash has announced CyberCoin, a service that will allow Internet users to draw upon their bank or credit card accounts to make payments of up to US$10 over the Internet. Users will keep tabs on their money with Internet Wallet, software that allows for encrypted financial transactions between them, merchants and banks. "It's the first industrial strength micro-commerce system that banks have gotten behind," Byles says.
He and Smith of Jupiter Communications say the next step is getting Web merchants to create content and services that can be easily sold for small amounts of money. "It's going to take some getting used to by both consumers and merchants," Smith says. "One of the biggest hurdles will be to get providers to develop goods and services that are deployable for that small of a cost."