Do you really need digital money?

More and more people are using the Internet. A recent survey by NOP Research Group shows that the number of homes hooked up to the Internet in the UK more than doubled within the past year and is now about 960,000. Many users shop on the Internet, using their credit cards to pay for goods and services. But what if your purchase costs only 25p? That is hardly an appropriate transaction for a credit card.

These transactions are referred to as micropayments by Internet users and there have been many suggestions how to deal with them. What is required is digital money and one of the most attractive suggestions for creating it is to scan a £5 note into your computer! When you have spent that you scan in another, but will you be able to resist the temptation to scan the same one in again and again and again? I said it was attractive. Sadly it does not work.

An article in The Independent for November 1st caught my eye. It seems that a system does exist in the USA whereby Internet users purchase a Cybercash wallet, from Cybercash Inc. of Virginia and download it and use the digital cash to pay for their small purchases. Digital Equipment Corporation (DEC) has launched MilliCent in the USA which will, no doubt, cross the Atlantic in due course. This is a system which supports transactions as small as one tenth of a cent. According to the paper, these small transactions are important to on-line publishers who want to sell newspapers by the article or music by the song or even cartoons by the strip.

DEC will find that there is already a supplier of digital cash in the UK - Barclays Bank. The system, known as BarclayCoin, was launched in October for a trial period to June this year. and it works in much the same way as Cybercash. Barclays customers download the wallet programme, which is free, fill in their Barclaycard details and decide how much digital money to hold in their wallets. Current account money can be used via a Barclays Connect card and, in the future, Barclays plans to allow funds to be added using other credit or debit cards. The BarclayCoin programme is designed to run on a personal computer using the Windows 95 operating system so users of Apple Macs will have to wait for their version.

Of course you can only use BarclayCoin at participating retailers. Some can be found in Barclaysquare (www.barclaysquare.co.uk). If you want to find out more about BarclayCoin contact www.barclaycoin.co.uk, or surprise your nearest branch by asking for details. One of the worries about using your credit card for payments on the Internet is the risk that your details may become more widely known than you would wish. However, shopping on line with BarclayCoin means that only the money in your wallet is being used and your credit card details and personal information are not transmitted.

John Brown.

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