Internet provider launches electronic commerce service

A UK Internet service provider has opened an online payment system on the Internet.

UK Internet service provider UUNet Pipex has opened an online payment system on the Internet. Called The Bureau, the system enables people to buy and sell consumer goods over the Internet.

The system will be based on Open Market's (OM) electronic commerce server, Transact. Internet users will be able to register for free while merchants will be charged up to £5000 a year.

The National Westminister Bank (NatWest) will act as Pipex's clearing house for all online debit- and credit-card transactions and will accept Mastercard and Visa payments.

Merchant customers of the Bureau will be able to embed purchase buttons on their World Wide Web page. The customer, if registered, will be able to click on the button and enter their user number and ID to purchase the item. "Once the user is registered, we can act as the middleman between the buyer and seller," says Richard Nuttall, business development manager for UUNet Pipex.

When the user presses the purchase button the order will go straight to the OM Transact server, which will relay the information to the NatWest Bank. The customer's credit card will be debited, the merchant's account credited, and the merchant will be asked to ship the goods to the customer's address. "Pipex will be underwriting the service. So there are none of the risks associated with passing credit card details over the Internet," says Nuttall.

The system will be upgraded later to handle Mondex, the Internet cash-payments system, in which the NatWest has a stake.

Pipex will also launching a business-to-business or electronic data interchange (EDI) system later next year, says Nuttall.

However, analysts believe that this type of system will only be used for low-end EDI transactions. "It's likely that merchants who are not currently using EDI may employ this type of service," says Kathy Burrows, UK research manager for the International Data Group in London. "However, it will be some time before the major retail, insurance and building companies move to any Internet based service, because EDI systems need to be integrated with these companies systems so that internal databases are automatically updated," she says.

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