First Virtual (First Virtual, "The First Virtual ...") was the first to provide a secure payment system to the Internet in October, 1994. Their system does not require any user software (except email), uses no encryption, and does not require a special bank account. When a user sets up a First Virtual account, the application is done over the Internet. To activate the account, they user must call a 1-800 number, input their assigned account number and their credit card information. In this manner, the credit card information never travels on the Internet. At First Virtual, all credit card information is stored on machines not connected to the Internet to enhance security. Currently, a First Virtual account costs a user $2 per year. Each transaction costs a vendor $0.29 plus 2% of the cost of the transaction.
When the user creates an account at First Virtual, he receives an account number called a VirtualPIN. This account number is in no way related to the user's credit card number. When the user finds a product he wants to buy, he sends the VirtualPIN to the vendor. The vendor verifies the VirtualPIN, and email-s it to First Virtual. First Virtual sends an email to the user confirming the purchase. When the user replies, First Virtual debits the user's credit card, deposits the correct amount (minus fees) into the vendor's account, and confirms the sale via email with the vendor. The vendor then forwards the product to the user. This system also supports the idea of shareware/demo periods. In this case, the user could download the product, and later initiate payment. More information about buying and selling using FirstVirtual is available (FirstVirtual, "Payment System Summary ...").
Copyright © 1996 Patrick N. Brooks
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