Personal Finance: Internet Investor: Fill your wallet with e-cash

More and more people are using the Internet. A recent survey by NOP Research Group shows the number of homes in the UK with Internet access more than doubled within the past year to 960,000. At the same time, the traditional image of the nethead nerd is also under attack. For example, the number of women using the Net is up by 40 per cent.

You may already be one of the growing number of people shopping on the World Wide Web with your credit card but credit cards have their limits and are unsuitable for smaller transactions, or micropayments, as they are known on the Net. This is where digital money comes in.

Sadly, you cannot create digital money just by taking a pounds 5 note and scanning it in to your computer. Life is not so easy. But e-cash can be just as handy as having a few notes and coins in your pocket or purse.

The idea has been around for a couple of years, which in terms of the Internet makes it positively ancient. In fact, CyberCash Inc of Virginia, one of the pioneers, was founded in August 1994. More than 1 million CyberCash wallets have been downloaded.

Of course, others are getting in on the act, including some established players in the computer business.

In March this year, Digital Equipment Corporation launched Millicent, a system now in the pilot stage, which will eliminate even the existing e-cash minimum purchase requirements.

Millicent is not yet available in the UK but in the US it supports transactions from $5 down to one-tenth of a cent. In case you were wondering who would be interested in such amounts, transactions in this range are important to online publishers who want to sell newspapers by the article, cartoons by the strip or music by the song.

BarclayCoin, which launched on 6 October 1997 for a trial period running to June 1998, is based on the system developed by CyberCash. BarclayCoin provides the ability to pay transactions of a value not normally considered suitable for payment by credit or debit cards.

It means you may buy things such as clip art, screen savers, images, news and information without any delay or postage and packaging costs. All you have to do is point and click and whatever you have selected arrives in your PC almost instantaneously. The price you see is the price you pay.

BarclayCoin allows you to spend any amount between 25p and pounds 10 but you need to download an electronic BarclayCoin wallet to do so. The wallet is free and supports all major web browsers, including Netscape Navigator, Microsoft Internet Explorer and AOL. However, you will not be able to use it if you have an Apple or Apple clone computer. It is designed for use on a PC running Windows 95.

You need to be a Barclays customer to use the BarclayCoin wallet. Once you have downloaded the wallet programme, fill in your Barclaycard details, then decide how much electronic money you want to hold in your wallet. The money is transferred from your available credit and turned into BarclayCoin funds. You may also transfer money from a Barclays Connect account into a BarclayCoin wallet. In the future, Barclays plans to allow funds to be added to the wallet from other credit or debit cards.

Now that we have our e-cash, where can we spend it? The answer is at any participating retailer - those on Barclaysquare are a good starting point.

If you are worried about security, remember that while you are shopping on-line all you are spending are your BarclayCoin funds. Your credit card details and personal information are not transmitted. They are retained in an encrypted form in your own PC.

Barclaysquare: www.barclaysquare.co.uk

BarclayCoin: www.barclaycoin.co.uk

CyberCash: www.cybercash.com

Millicent: www.millicent.digital.com