In what may be among the earliest tests of Internet-based financial transactions, BankAmerica Corp. and the Energy Department's Lawrence Livermore National Laboratory have been making financial electronic data interchange payments over the huge network for about a month.
The companies said the payments, to five vendors, have totaled $40,000 to $60,000 daily. The vendors' names were not disclosed.
Lawrence Livermore, a Livermore, Calif.-based cash management customer of BankAmerica, pays about $300 million a year to over 3,000 vendors.
Marty Stein, vice chairman and head of BankAmerica Systems Engineering, said the pilot project, which is to last six months, "marks the first totally automated and electronic EDI application employing digital signatures and public-key encryption to occur on the Internet."
"There's real money flowing - it has been for a month," said John Rhodes, project leader with Lawrence Livermore. Now, he said, "we are only issuing payments to those vendors whose banks provide EDI capabilities."
Electronic data interchange is the computer-to-computer exchange of business data in standard formats, such as purchase-order documents, invoices, financial documents, and payment-processing documents. Financial EDI occurs when payments are sent with the data.
Bill Jetter, a vice president and project consultant with BankAmerica, said the pilot's goal is "to see if we can transfer payment data between a company and a bank securely." Rather than use private networks such as value added networks, he said, "we are exploring to see if there is a better way, a cheaper way."
Mr. Rhodes said the Internet, with its global reach, may be the answer.
In the BankAmerica model, sensitive information is wrapped in the Internet's electronic mail envelope using private-key technology - the Data Encryption Standard - and public-private-key technology from RSA Data Security Inc.
At the bank, the transmission meets a "firewall" between the Internet and the bank's internal network. A server computer verifies the transaction, then routes it to BankAmerica's EDI system.
Lawrence Livermore receives electronic acknowledgement in about six minutes, while the bank sends the information, along with payment, through the …