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October 27, 1997, Section: Internet Reseller

IBM stakes another claim on E-commerce landscape

By Charlotte Dunlap

Somers, N.Y. -- IBM Corp. is backing another major SET-enabled electronic-commerce trial, claiming its technology now supports 50 percent to 70 percent of the country's electronic credit-card transaction traffic.

IBM this month unveiled a deal to provide CompuServe Network Services with Web-based commerce software to support online merchants and payment card processors with support. IBM already is involved with another similar relationship with First Data Corp., Hackensack, N.J.

The IBM software, called CommercePoint Gateway, provides immediate authorization to credit-card payment requests made over the Internet. Currently, once consumers make a purchase at a Web site, the credit or debit card is not authorized right away.

The technology's efficiency is based on the Secure Electronic Transaction (SET) protocol, said Scott Dueweke, marketing manager for electronic payments and certification at IBM.

SET offers encryption features, as well as digital-certificate technology to the merchant servers in an effort to secure the customer's credit-card information.

IBM officials said today's security technology, namely Secure Sockets Layer (SSL) by Netscape Communications Corp., only includes encryption features.

"Digital certificates [are] what makes SET great," Dueweke said. "When you get your credit card, your issuing bank issues you with a digital certificate that's housed in an electronic wallet on your hard drive that enables merchants doing business with you to know you're who you say you are."

IBM's CommercePoint Gateway product is now being used in over 40 pilots worldwide to support the electronic transactions between the merchant and the bank.

CompuServe Network Services provides electronic connectivity to hundreds of banks that do credit-card processing for merchants.

The move supports IBM's thrust into the E-commerce realm, illustrated through a flurry of recent television commercial advertisements promoting the company's "E-business."

" We want to support and enable businesses to get out there on the Internet and make some money," Dueweke said. "The most critical function you can provide as a provider of E-business is the ability to handle transactions securely over the Internet."

IBM's commerce technology includes its merchant server, Net.Commerce, a payment server, called CommercePoint eTill, and the CommercePoint Wallet for credit-card holders, which is issued from banks, and where digital certificates are housed.

Some observers have voiced concerns that SET will require whole new costly systems to be built by the merchant and finance communities. IBM disagrees.

"I don't think so," Dueweke said. "Not including whatever cost it takes for the merchants to set up [their merchant servers], they will pay just the software cost."

IBM's merchant server, Net.Commerce 2.0, is priced at $4,995. IBM's payment server, eTill, is priced at $2,000. It enables older merchant servers to support SET transactions. Net.Commerce 3.0 is due out soon.