[2592] in cryptography@c2.net mail archive
Re: Credit cards crushing virtual cash
daemon@ATHENA.MIT.EDU (Rick Smith)
Tue Apr 28 01:16:09 1998
In-Reply-To: <v04003a01b1678026f773@[139.167.130.247]>
Date: Mon, 27 Apr 1998 11:06:32 -0500
To: cypherpunks@cyberpass.net, cryptography@c2.net
From: Rick Smith <rick_smith@securecomputing.com>
Regarding First Virtual:
>[ZDNNet News] (4.24.98) The struggles of First Virtual Holdings Inc.,
>an e-commerce technology company, to make its payroll have left many
>wondering: What ever happened to virtual cash? ... skipping ahead...
>
>"It says more about (First Virtual's) business model than it does
>about virtual cash," said analyst Cliff Condon of Forrester Research
>Inc. As for forms of electronic payment other than credit cards,
>there's room for plenty of choices, Condon believes. "Some people just
>don't like credit; they prefer to buy as they go. There's room for
>that."
This is a red herring. The choice between "credit" and "debit" isn't a
property of the card technology, it's a property of the issuing
organization. I've got two Visa cards issued by different companies: one is
a "credit" card and the other is a "debit card." They act the same in
Internet transactions, though one dispenses "cash" and the other dispenses
"credit."
Skipping ahead...
>In response, e-cash's original proponents have modified their
>approach, seeking to make their products more appealing to those
>accustomed to the credit or debit-card model.
I don't think the transaction model is as important to consumers as the
size of the community that will accept the form of payment. I use cards for
transactions because I find the plastic convenient and *lots* of places
take it as payment. I never bothered to set up an e-cash account because I
rarely encounter places on the Internet where such payments were supported
or beneficial. I've *never* used a place that accepted e-cash but didn't
accept the same credit cards accepted by everyone else.
If people are faced with equally confusing alternatives (credit card
purchases or e-cash purchases) they'll choose the one that covers the most
cases.
IMHO, e-cash can only succeed if it becomes the mechanism of choice for
some popular Internet product. Success depends more on developing
successful business alliances than on the quality of the protocol.
Unfortunately, there aren't many highly desirable products that are best
acqured over the Internet. If a particular transaction protocol managed to
dominate a popular product area, then the protocol would have a chance to
succeed. People don't want to learn one procedure (and one software
package) for buying shirts from LL Bean and a different one for Land's End.
Rick.
smith@securecomputing.com
