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Computer peripherals industry

Next-Generation Infrastructure for Debit Transactions Over the Internet Nears Reality

Strategic Insights

— 2 min read

A collaborative effort among industry players has led to a significant milestone in developing a next-generation infrastructure to enable debit transactions over the internet. The Internet Secure ATM Payments (ISAP) pilot, coordinated by NACHA, has successfully tested a digitally signed payment through an EFT network, marking the first usage of digital signature technology in an internet ATM/debit transaction in the United States. The pilot aims to establish technical standards, business practices, and processes for consumers to purchase goods and services over the internet using their ATM/debit cards, authenticated by digital signatures instead of personal identification numbers.

Key Takeaways:

  • The ISAP pilot is a cooperative effort to develop the infrastructure for internet-initiated ATM/debit card payments to occur.
  • The pilot is providing input into the EFT networks' operating rules and developing technical standards and business practices to support real-time purchases on the internet.
  • A collaboration of ActivCard, AmeriNet Inc., ANI Services, A-OK Network, Certicom, and UTM Systems Corp. developed the technology and protocols to enable consumers to digitally sign payment requests.
  • In the technical tests, a digitally signed payment request was successfully sent from a simulated merchant Web site through the STAR electronic payments network to Citishare Corp., which verified the digital signature to complete the transaction.
  • The technology allows consumers to use their ATM/debit cards to make real-time purchases on the internet, authenticating with digital signatures instead of personal identification numbers.
  • The pilot has demonstrated the viability of utilizing the existing secure infrastructure of the STAR network for all future applications of electronic payments with new access channels.
  • A full pilot is scheduled for later this year, which will involve real merchants and real funds in a test with employees and testers.
  • Other members of the ISAP pilot workgroup include Concord EFS, Inc., owner of the MAC Network, CyberGold, Equifax, and MerchantOnline.com.

Statistics:

  • The ISAP pilot is the first usage of digital signature technology in an internet ATM/debit transaction in the United States.
  • The STAR network received the transactions in a standard message format, modified to support digital signatures.
  • The pilot has demonstrated a secure alternative for consumers who don't have a credit card or don't want to transact business over the internet.
  • The technology has the potential for a large volume of transactions, with millions of consumers potentially using it.
  • The system would debit the consumer's checking account through the Automated Clearing House (ACH) Network.

Sources:

  • NACHA, "Internet Secure ATM Payments (ISAP) Pilot: A Cooperative Effort to Develop the Infrastructure for Internet-Initiated ATM/Debit Card Payments to Occur"
  • Julie Hedlund, senior director, Internet Commerce, NACHA - The Electronic Payments Association, 703/561-3915
  • David Kerlin, president and CEO of AmeriNet Inc., 503/670-8292
  • Bob Plunkett, president, ANI Services Inc., 858/695-6400
  • Ronald Congemi, president and CEO, Star Systems Inc., 619/234-4774

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