Consumer Payment Card News

Millicent Payment System Coming

The first microcommerce system that will enable millions of Internet users to buy and sell information profitably, down to fractions of a cent was announced yesterday by Digital Equipment Corporation. ‘Millicent’, now in a pilot stage, will eliminate minimum purchase requirements of 10 to 25 cents now imposed by other electronic payment methods and will support transactions as low as one-tenth of a cent. Web users will be able to pay automatically for information and services by each click of a mouse. The ‘Millicent’ system uses the distributed brokers approach versus a centralized clearing-house approach. Vendors contract with brokers to sell scrip to users. Brokers pay vendors as they sell scrip. Users will purchase the scrip from brokers via credit cards. Companies participating: Reuters News Service, Infoseek Information Network and Tele Danmark.

FULL STORY:

Digital Equipment Corporation (NYSE: DEC) today announced plans to make microcommerce on the Internet a reality with “Millicent,” the first cybercommerce system that will allow millions of users to buy and sell information profitably down to fractions of a cent. This breakthrough system, now in the pilot stage, will eliminate minimum purchase requirements of 10 to 25 cents now imposed by other electronic payment methods.

The Millicent system represents a completely new way to buy and sell content in very small amounts over the Internet. The system supports transactions from one-tenth of a cent to $5. Microcommerce transactions in this range are important to online publishers who want to sell newspapers by the article, cartoons by the strip, or music by the song. Software providers targeting the network computer (NC) market can use Millicent to sell Java applets and host-based applications on a per-use basis. In an intranet setting, Millicent software acts as a Web-aware accountant that meters access to information systems and to services inside the enterprise.

“The Millicent approach makes ‘pay-per-click’ surfing of the Web affordable for all,” said Robert Supnik, Digital vice president of Research and Advanced Development, Corporate Strategy and Technology group. “Other payment methods at a quarter a click can quickly outstrip a Web surfer’s budget. Millicent was designed from the ground up to achieve low-cost transactions by using a revolutionary distributed brokers approach to speed verification and minimize cost.”

“Millicent also answers the question of how companies can profitably use the Web,” added Supnik. “A publisher, for example, who now has hard copy and on-line subscriptions for sale, can offer the same information to Web users on a page-by-page or article-by-article basis, adding a new, high-volume, and profitable revenue stream.”

Users benefit because they select only the information of specific interest to them, and pay only pennies a page or less for that information, not for the whole publication.

Participating with Digital in an internal test are Reuters News Service, Infoseek Information Network and Tele Danmark, the public telephone and telegraph of Denmark. A major broker with international experience will be announced shortly.

Digital has established a public Web site at http://www.millicent.digital.com for Web surfers seeking a complete overview of Millicent and for potential content providers interested in participating in the testing phase.

New Internet Markets

According to Jay Zager, Digital vice president of business operations, Corporate Strategy and Technology group, “Millicent will open up a whole new level of electronic commerce products and services offered on the Internet. In addition to its appeal for traditional publishers, the Web will be much more attractive to electronic publishers, self-publishers, software publishers and service providers, who will now have an incentive to provide higher quality information to Web users and get paid for it. When you consider the on-line games industry and other entertainment applications, the possibilities are endless,” he said.

A Penny’s Worth of Information

While Millicent will expand markets for existing electronic publishers, new content providers also will be attracted to the Internet as a viable market for their products. Millicent will open the Internet to profitable electronic commerce for all, including:

— Traditional publishers: newspapers, magazines, directories, newsletters, news service feeds, academic journals, encyclopedias, and book publishers;

— Web-centric content providers: Java applet developers, search engines, rating services, e-zines, serialized soaps, online games and entertainment; and

— Self-publishers: personal essays, subject indexes, annotated note lists, personalized newsgroup moderation, and how-to guides.

The Millicent Approach

Millicent was developed by Mark Manasse and Steve Glassman at Digital’s Systems Research Center in Palo Alto, Calif. It uses a revolutionary distributed brokers approach, versus a centralized clearing-house approach, to speed verification and minimize costs. Vendors contract with brokers to sell scrip to users. Brokers pay vendors as they sell scrip. Verification is quick, easy and automatic, allowing for extremely fast, high-volume transaction rates. With other approaches, each buying and selling transaction has to clear through a central verification point, adding costs, creating bottlenecks, and slowing execution.

After the user purchases the scrip from a broker via credit card or other standard payment method, all transactions are transparent. The user buys information with a simple click of a mouse. A running log keeps track of how much scrip users have available in their Millicent electronic wallets. At a penny a page or less, users can focus on the content of the information rather than the cost.

Millicent Benefits

This patent-pending microcommerce system will provide Internet users the most economical and convenient way to purchase exactly the information they want on the Web. Information sellers, in turn, benefit because Millicent gives them an incentive to provide high-quality information and to profit from high-volume purchases. Millicent brokers will profit from managing the penny- based electronic scrip transactions between buyers and sellers.

Millicent’s design scales well for high-volume transactions. Brokers can manage more transactions with less hardware. Less verification is required and Millicent’s instantaneous operation eliminates verification time lag at the time of transactions and at the end of the day. Brokers therefore can generate profitable revenue even on one-tenth-of-a-cent Millicent transaction fees.

Electronic Fraud Unprofitable

Millicent makes electronic fraud unattractive and very difficult. The system was designed to make it virtually impossible to double-spend, counterfeit, or change the value of the scrip. Millicent transactions, typically a few cents or less, provide little incentive and a high likelihood of detection for those attempting to steal large amounts of penny-based scrip.

Digital Equipment Corporation is a world leader in open client/server solutions from personal computing to integrated worldwide information systems. Digital’s scalable Alpha and Intel platforms, storage, networking, software and services, together with industry-focused solutions from business partners, help organizations compete and win in today’s global marketplace.

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