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- NEW
YORK - It will take some
time before digital
currency takes over and we become a "cash-less"
society, but
the groundwork is already being laid and the technology has
matured
enough for widespread use.
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- A recent report released by the Aberdeen Group suggests
that the use of digital cash payments for smaller transactions, called
"microtransactions," over the Internet will challenge
traditional
payment methods such as credit cards.
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- The report analyzes emerging
digital-cash payment options,
such as "stored-value" smart
cards that allow users to make a
secure online purchase in a way
similar to using an ATM/debit card.
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- It also profiles 21 vendors in
the digital cash software
and services arena, such as 1CLICK*CHARGE,
ClickShare Service Corp. Compaq,
eCash Technologies, MasterCard, Visa,
Media DNA, Microsoft and Qpass.
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- An eventual move to digital payments is good news for
e-commerce merchants, especially those that rely on lots of smaller
purchases
like digital music.
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- Research director and author of
the report, Judith Rosall,
found that the cost of processing small
financial transactions for businesses
has blocked the proliferation of
low-cost, pay-as-you-go methods. Digital
currency technologies, by
contrast, have matured enough to allow easy and
inexpensive-to-process
payments.
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- It's also great for consumers who get annoyed at having
to
enter personal information repeatedly in order to make a purchase.
According
to Jupiter Communications, 27 percent of online consumers
abandon the items
they put into a shopping cart because they find
filling out the forms too
difficult.
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- Microsoft's Passport, for
example, takes care of that
problem. Passport is essentially an
electronic wallet that stores all
the customer's personal billing and
shipping information and a single sign-in
name to use at sites that
support Passport. (A credit card is used, but
it's stored in with your
Passport information.) It's easier for consumers
because they don't
have to keep of track different sign-in names and passwords
just to
make a simple purchase.
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- Obstacles to widespread use of solutions like Passport
still exist. First, Web sites have to build in support to work with these
solutions, but there is no standard in place for accepting smart card or
electronic wallets. Second, consumers still harbor security fears when
it comes to making online purchases, and particularly about storing all
their personal information in one place.
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- But slowly, consumers and
commerce are coming of digital
age.
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- "We believe that digital
cash technologies will
begin growing in adoption and acceptance as
early as 2000," said Rosall.
"It will also contribute to
significant worldwide e-commerce market
growth, particularly in the
sales of digital content, digital music, and
on-line
gaming."
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