Magazine article American Banker

Star Systems Tests E-Signatures for Web ID

Magazine article American Banker

Star Systems Tests E-Signatures for Web ID

Article excerpt

Star Systems Inc. is conducting a five-month pilot test in which people use digital signatures to authenticate Internet payments with debit cards over its electronic transfer network.

Normally, when people use a PIN-based automated teller machine or debit card, they must punch in their personal identification number at the point of sale, which effectively precludes the use of these cards on the Internet. In the Star Systems pilot the digital signature substitutes for the PIN.

In the test, which began in November and will continue through March, more than 100 consumers with PIN-based debit cards have been given digital certificates and are using the digital signatures attached to them to validate transactions they make through the Web. Half the cards also have microprocessor chips, which can store the digital certificates and signatures.

The experiment makes Star Systems, the Maitland, Fla.-based debit and automated teller machine network, the second electronic funds transfer company to try to adapt debit cards to gain a toehold in Web commerce. NYCE Corp. of Woodcliff Lake, N.J., has been developing a technology called SafeDebit that is also aimed at letting people buy goods on the Internet using PIN-based debit cards, which they cannot do today.

Most online commerce is conducted with credit cards or with the signature-based debit cards that bear the Visa and MasterCard brands and run over the associations' networks. But NYCE, Star, and the other electronic funds transfer networks do not handle those types of cards, so they have been seeking ways to gain relevance in Internet commerce. If a method of doing PIN-based debit card transactions on the Internet took hold with consumers, it would be a boon to these networks.

Nacha, the electronic-payments association, is coordinating the Star Systems pilot through its Internet council. …

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