ISSUE 438: THE HIGH-TECH OFFICE
Touchlink finance system offers peace of mind
for customers and retailers nervous of the Net - March 17 1998
Web sites can produce impressive online sales: Microsoft's
Expedia virtual travel agency claims sales of $140 million a year. That
figure is dwarfed by computer manufacturer Dell, with a site
bringing in $3 million in sales each day. (Locally, check out online
computer store MegaDepot: www.megadepot.com.)
Despite these impressive figures, only a fraction of
the increasing numbers of people using the Net are prepared to make
purchases online. The fall AC Nielsen Canadian Internet Survey,
for example, claimed that 31 per cent of adult Canadians said they
currently use the Internet, with 15 per cent using the Internet on a
daily basis. But only 13 per cent had made a purchase on the Net, while
84 per cent reported being concerned about sending their credit card
number over the Internet.
Because of this, for many businesses the promise of
retail sales via the World Wide Web has been put on hold until
consumers become less wary of spending money over the Net.
Although we've discussed in this column how credit
card transactions on the Web are no more dangerous than paying with
plastic for a restaurant meal, the reality is that, for many potential
customers, electronic commerce has to be more secure than the
face-to-face equivalent before they'll risk online purchases.
The banks and credit card companies have been pushing
for standards that would set the stage for an explosion in safe and
reliable Internet commerce, and their efforts may be bearing fruit. For
example, the Royal Bank and Visa are two of the
partners promoting the Touchlink Secure Electronic Web Payment System.
It has many similarities to the familiar electronic
point-of-sale system, except that it transmits information across the
Internet, with information being shared between the customer's
computer, a retailer's secure Web server and an accredited Touchlink
Gateway server. When the customer enters a credit card number, the
information is relayed to the Touchlink server, which verifies the
transaction and credits the retailer -- all within a few seconds.
For consumers, the security of the system is indicated
by their browser. Depending on what version they're using, Netscape
browsers will show a tiny broken key or an open lock
icon on the bottom of the screen when browsing an insecure site. When
the consumer connects to a site using Secure Socket Layer technology,
the lock closes. (Internet Explorer users won't see an indication of
insecure sites, but should see a similarly locked icon when on secure
The system provides security for consumers on several
levels. Information leaving the customer's computer is encrypted,
making it useless if intercepted. Credit card numbers go to the
Touchlink server, not to the retailer. And to make use of the system,
retailers have to apply for certification from Touchlink, ensuring
potential customers that they are legitimately in business -- a
condition that should help overcome the possibility that "On the
Internet, nobody needs to know you're a dog."
Retailers can use this system to decrease cost. It is
completely automated, to be open for business seven days a week, 24
hours a day. As with other credit card transactions, there are no NSF
cheques or invoicing problems. And it can be integrated with existing
counting and shipping systems, so data won't need to be reentered. A
U.S. dollar account can be created, allowing American customers to be
charged in US$ without conversion charges on their credit cards, and
letting merchants post prices in U.S. dollars with less regard for
The system currently accepts Visa, MasterCard,
American Express and Enroute credit
cards. Cost to the merchant includes a $500 setup fee and a monthly
charge of $50, which covers the first 100 transactions. Additional
transactions are billed at 50 cents each. Your business will need to
have an established inventory management or shopping cart system to let
customers make purchases online.
As well, retailers hoping to use the Touchlink system
need a Royal Bank Visa merchant account and may need to post a secure
bond with the bank as a guarantee against chargebacks. This will let
you get a digital certificate and Electronic Commerce Registration
number as an online business. Call the Royal's Debra Fahr
(665-8556) for details.
Vancouver-based Strategic Profits Inc. offers
a Web site labelled "Turnkey E-Commerce Business Solutions" at info@forprofits.
com where you can test the payment server system, making a token
$0.01 online purchase, and placing it on your credit card.
Some stores will be more appropriate for online
business than others. I know I still want to handle the avocados to get
a couple that are just right for my guacamole. For some purchases, even
secure online equivalents won't work.*