Middlemen could make online buying as safe as a walk in the mall

A new type of middleman-the online content provider-is emerging to coordinate buying,
selling and payments. Value-added networks can still handle this kind of three-way
interface, but increasingly it has become the domain of the content provider.

For instance, the intermediary might be a World Wide Web site that hosts online
catalogs and acts as a trusted third party for exchanging digital cash. I'm not talking
about a cyber shopping mall but a specialty site that serves a niche market, such as the
government, by customizing interfaces for its end users.

Such sites could become the ultimate comparison-shopping source for government buyers.
Now that the administration has softened its edict that agencies use FACNET for all
routine buys, it's likely that this sort of online procurement finally will take off.

GC Tech Inc., a French company with a New York office, is becoming a key player with
its proprietary GlobeID technology for securing and certifying international electronic

GlobeID is part of the Joint Electronic Payments Initiative (JEPI), an effort to
develop a trusted Internet payment protocol, sponsored by the World Wide Web Consortium
and the CommerceNet.

Francis Cohen, a GC Tech research analyst, told me his company works mainly with banks
and financial institutions. Manufacturers and end users such as federal procurement
officers would work directly with GlobeID partners to set up their commerce systems.

Just as a bank issues the government's IMPAC credit cards, banks could serve as central
hubs for online purchasing and payment. The GlobeID transaction server would reside at a
bank that offered client software to merchants.

These in turn would work with end-user procurement officers to develop custom,
downloadable software that would interact with merchants' systems in a secure, encrypted
environment. For extra protection, transaction requests would be authenticated by digital

Once a procurement officer created an account, only his individual transaction requests
would travel over the Internet-all the sensitive financial information would have been
recorded when the account was opened. For more information, visit GC Tech's site at http://www.gctec.com/.

GlobeID works in national or international mode, meaning customers outside the country
would see prices listed in local currency. The interface could be set to calculate
regional price differences or negotiated contract prices.

Right now, the end-user software is a standalone Microsoft Windows or Apple Macintosh
program that Cohen called an electronic wallet. However, GC Tech will build a plug-in for
Web browsers and is working with Microsoft Corp. on a server-side plug-in for Microsoft's
Merchant Server to interface directly with GlobeID users.

Other vendors also plan robust merchant servers that differ from the usual Web server.
Netscape Communications Corp. is marketing its merchant system as a place to host easily
updated catalog databases. Because many government contracts now have monthly refresher
clauses for products and prices, this could be a boon to government buyers as well as

The next logical step is for makers of merchant server software to identify third
parties that banks, merchants and customers all trust to certify their transactions and
host content.

Look for content providers to begin contracting with merchants and holders of
government contracts to host catalogs and provide database maintenance. Also, news
services will spring up to give procurement officers current information on new products
and ordering links.

Of course, less complex services exist for buying online with IMPAC cards. Will these
prevail because of their simplicity? Only time will tell. Visit the Navy's Information
Technology Electronic Commerce site at http://www.nismc.navy.mil/itec.direct/itec.htm for a good example of how these systems work.

To see how merchants would design interfaces for government customers, visit General
Electric Information Services' Trading Process Network at http://www.tpn.geis.com/. It shows several
turnkey, Web-based electronic commerce products. Or visit Loren Data Corp.'s electronic
data interchange system at http://edi.ld.com/.

Shawn P. McCarthy is a computer journalist, webmaster and Internet programmer for
GCN's parent, Cahners Publishing Co. E-mail him at smccarthy@cahners.com.

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