First banks go live with online B2B payment system
Computerworld -
A group of four major banks based in Europe and the U.S. today said they're going live with a system that's designed for use in processing large electronic payments between different companies.
The technology, developed by New York-based consortium Identrus LLC, provides identity confirmation, security and a legal framework for large financial transactions. That's supposed to make it easier for banks to do business on the Internet and to help them give commercial customers ready access to online payment capabilities.
Bank of America Corp. in Charlotte, N.C., and European financial institutions ABN AMRO Holding N.V., Deutsche Bank AG and HypoVereinsbank are the first to deploy business-to-business payment applications based on the system developed by Identrus, which was formed last year by a group of eight banks. Other members of the consortium include Barclays PLC, Chase Manhattan Corp. and Citigroup Inc.
An Identrus spokeswoman said business customers of the participating banks are eligible to receive an Identrus-approved digital certificate and a smart card. They would then use the smart card to log on to a Web-based system that lets them make electronic payments to other companies that also have Identrus certificates, she said.
Other companies make similar promises - for example, VeriSign Inc. in Mountain View, Calif., also offers authentication services for online payments. The Identrus spokeswoman said VeriSign's technology supports the Identrus system and is also being used by Bank of America.
But Identrus differs from vendors such as VeriSign because it's a vendor-neutral consortium of financial institutions and as such is the closest thing that the business world has to a global standard for securing large-scale electronic payments, said Avivah Litan, an analyst at Gartner Group Inc. in Stamford, Conn.
"You need a bank-owned consortium to pull [the development of such a standard] off," Litan said. However, she added, a recent Gartner survey showed that moving to digital certificates for processing business-to-business payments isn't a high priority for most companies, with less than 1% of transactions involving the technology at this point.
"User IDs and passwords work fine today," Litan said. "I don't think digital certificates will be a total failure, but it's going to be an uphill battle [for Identrus and other proponents]."
Related stories:
- Citigroup launches new e-cash service, Oct. 31, 2000
- First Data spins off e-payments company, Oct. 9, 2000
- The speed of money, Aug. 14, 2000
For full coverage of information security issues, visit our Security Watch page.
E-business
Additional Resources



White Papers & Webcasts
The State of PCI DSS Compliance at Organizations Today
Download this resource today!
Managing Secure File Transfer to Save Time, Money and IT Resources
Learn how companies are using innovative technology to overcome these challenges and improve user productivity by offloading e-mail attachments and replacing FTP with...
Can Heuristic Technology Help Your Company Fight Viruses?
What is Heuristic Technology and how can it help safeguard your business against viruses? Learn more.
Security Convergence Equals Network Security Cost Savings
Listen to IBM Internet Security Systems' take on network security convergence.
Why Email Must Operate 24/7 and How to Make This Happen
Learn how to avoid an email outage by implementing a hosted email continuity solution.
Lower the Cost and Complexity of a Mobile Workforce through Automation
Download This Resource Now!
Eradicate Spam & Gain 100% Asurance of Clean Mailboxes
Get this paper now!
Managing Mobility: Improve Data Security, Compliance and Manageability
Download This Resource Now!
Mastering eDiscovery: The IT Manager's Guide to Preservation, Protection & Production
Get this paper now!
Disaster Recovery 2008: Reduced Costs and Improved Performance
How long can your Enterprise afford to be without your data? With an accelerated disaster recovery program, you never have to answer this...
