The OTP website (http://www.otp.org) gives access to the OTP
specification, informational material as well as an email forum to
facilitate the exchange of comment and recommendations by merchants,
vendors and financial institutions. The website will also provide
any updates to the specification that come as a result of this exchange.
The OTP standards enable a consistent framework for multiple forms of
electronic commerce, ensuring an easy-to-use and consistent consumer
purchasing experience regardless of the payment instrument or software
and hardware product used. The protocol is freely available to developers
and users, and builds on XML, an emerging standard for information
exchange on the Internet. As a set of truly open standards, the protocol
is not "owned" by any one company, and its development will be managed
by an appropriate independent organization.
"The publishing of the OTP standards represents an important milestone
in the development of electronic commerce," said Michael Keegan, CEO,
Mondex International, a consortium member. "If the potential of electronic
commerce is to be fully realized, it will flourish only in a truly open
and interoperable environment, an environment that the OTP standards provide."
"Electronic commerce is really starting to click. The OTP specification
has been designed to support and complement other specifications like
SET (Secure Electronic Transactions) and the EMV (Europay, MasterCard
and Visa) chip card specification to offer a consistent online
interaction for consumers, merchants and banks using any number of
payment options," said Steve Mott, Senior Vice President, Electronic
Commerce/New Ventures, MasterCard International.
"Standards are the key to the Internet, and they're the key to making
it easy for our customers to become e-businesses," said Mark Greene,
vice president, IBM Internet payments and certification. "OTP has done
a significant service to the industry by making this standard available for all of us."
The OTP initiative, established in anticipation of what is expected
to be a multi-billion dollar industry by the turn of the century, now
gains the support of DigiCash and SIZ, two leaders in retail electronic
payment systems (see Notes to Editors). Today's announcement that
DigiCash, a pioneer in the development of electronic payment systems,
and SIZ Computer Science Center of the German Savings Banks, a German
leader in smart card introductions, especially GeldKarte, will both
support OTP as a global standard for retail trade on the Internet
demonstrates the growing momentum for the standard. Thirty other
members of the OTP consortium have brought OTP from a concept to
a significant standard in the Internet marketplace in just nine months.
"The OTP will ensure that traders, retailers and shoppers will all speak
the same electronic language," said Michael C. Nash, president and CEO,
DigiCash. "We fully anticipate that Internet shopping will quickly become
more popular in the next few years, and the OTP standards will help that process."
Alexander von Stülpnagel, CEO of SIZ, agreed. "The most important need for
the success of Internet commerce is the existence of a framework which
handles the whole business transaction and where different payment systems
can fit in. OTP is this framework which can ensure that all
business partners are provided with systems for global and local Internet commerce."
The OTP standards were pioneered by AT&T, Hewlett-Packard Company, MasterCard
International, Mondex International, and Open Market Inc., as well as all of
Mondex International's shareholding banks. Others who have combined with the
effort to develop the OTP include Hitachi, Royal Bank of Canada, BT, Canadian
Imperial Bank of Commerce, CyberCash, Dot Matrix, First Data Corp., Fujitsu,
GIS, Hyperion, IBM, Information & Database Network, Intertrader, JCP Ltd.,
MPACT Immedia, Inc., Mercantec, Netscape Communications Corporation, Nokia,
Oracle, Smart Card Integrations Ltd., Spyrus, Sun Microsystems, Unisource,
VeriFone and Wells Fargo.
The Internet marketplace is growing rapidly and is expected to be a
$200 billion industry by 2000, according to Forrester Research analysts.
However, this marketplace is critically dependent upon commonly accepted
universal standards for trading, security and commercial operations.
This protocol will reduce the merchant cost of setting up and doing
business on the Internet, while retaining the flexibility to offer products
and services in differentiated and innovative ways.
With the number of people who have purchased online currently reaching
10 million, according to Nielsen Media Research, the OTP standards will
play a key role in rapidly increasing that number by providing greater
confidence in the efficiency and reliability of the Internet marketplace.
With the benefits of online shopping - greater access to information and
increased control in searching for goods and services - fast becoming
evident, consumers, operating within the OTP standards,
are expected to shop online with confidence and ease, regardless of the
payment method, instrument, or software/hardware components they use.
The OTP standards specify how Internet trading transactions can occur
easily, safely and efficiently for all parties, independent of the method
of payment - very similar to the trading environment in the physical world.
Many existing protocols such as
Secure Electronic Transaction (SET),
a global industry standard for secure credit card
payments over the Internet (see Notes to Editors), focus on making a payment.
The OTP standards complement but don't replace these protocols by providing a
clearly understood set of rules that cover the following:
In addition to providing consumers with a consistent approach to trading
on the Internet, consumers will also have records of purchases which could
be used for tax purposes, making expense claims, feeding into financial
management software or sending a claim back to a merchant to solve a problem.
- offers for sale;
- agreements to purchase;
- payment (by using existing payment products, such as: SET, Mondex, CyberCash, GeldKarte, etc.);
- the transfer of goods and services;
- receipts for purchases;
- multiple methods of payment;
- support for problem resolution;
- payment brand and protocol selection.
Notes to Editors:
SIZ focuses on setting standards for the German Savings Bank Organization
(GSBO) in terms of architecture, methodology and products, providing
consulting services and coordinating joint application development of
IT centers (but not developing applications on its own). This is done
in close cooperation with the IT centers and the Deutscher Sparkassen-
und Giroverband (DSGV). According to its mission, SIZ is basically covering
all of IT, with special emphasis on technology (systems, telecommunications,
office), security, application coordination and application provision. One of
SIZ's tasks was the introduction of Germany's electronic purse, the GeldKarte.
Now, 40 million GeldKartes are issued by the GSBO.
Founded in 1990, DigiCash is a pioneer in the development of electronic
payment systems that provide security and privacy. Available for open and
closed systems and network use, DigiCash's products are based on patented
developments in public key cryptography devised by Dr. David
Chaum. DigiCash's first product was a road-toll system developed for the
Dutch government. DigiCash's cryptographic technology has also enabled the
company to develop smart cards for a diverse range of applications including
CAFE, the smart card-based payment system operated by the Headquarters of the
European Union in Brussels. The CAFE project was funded by the European Union,
just one of the several European Union technology projects with which DigiCash
has been involved, designing cards that feature pre-paid cash replacement
functions, loyalty schemes and access control.
SET (Secure Electronic Transaction) - a global standard - secures credit card
payments over the Internet by utilizing digital certificates, which validate the
genuine identities of both cardholders and merchants participating in transactions
via the Web, combined with the encryption
of individual card numbers.
A reprint of David Birch's (Hyperion) recent Financial Times Virtual Finance
Report article on the concepts behind shopping protocols - such as OTP - is
available from David in electronic form (PDF). E-mail directly to email@example.com
to request a copy.