NatWest banks on Cyber commerce venture

With the e-commerce revolution still being held back by consumer fears about security, NatWest is banking on its high-street name and credibility to woo Cyber wary shoppers.

Bernard Horn, executive director of group operations at NatWest believes the bank's position as a trusted brand and international clearing house for credit card transactions will put it in a "unique position" for online trading. "We are hoping to do for digital distribution what credit cards have done for the analogue economy," he said.

The Magex platform comprises a Digibox, a secure electronic envelope in which vendors will put digital content including music, games, video and text. The Digibox has copyright protection provided by e-commerce security firm InterTrust allowing content providers to control the distribution of material.

For example, users will be able to pass downloaded music on to other people but recipients will not be able to access it without Magex software and will have to pay for copies. Providers can customise the Digibox to incorporate different pricing structures, special offers and loyalty discounts.

Consumers will receive software to access content and, once they have registered, will be given a PC-based electronic wallet which is debited every time they make a purchase. Users will be have a pre-paid limit on their wallet and currently only Mastercard and Visa are being accepted as payment methods.

One of the advantages of the system according to Magex managing director Peter Beverley is the fact that credit card details need not be given every time a purchase is made. "Users will only give us their credit card details when they register -- giving it just once to a bank helps build trust," he said.

Jupiter analyst Nick Jones predicts other banks may follow NatWest's lead as their traditional role as guardians of financial information is challenged by the Internet. But he is not convinced consumers will want to be tied down to one system once the e-commerce bandwagon is in action. "As consumers gain confidence, security may drop down the agenda and having to download a secure wallet may be overkill," he says. He thinks the success of Magex will lie with marketing. "The way to sell it will be through other benefits, like easy management of personal finances and loyalty points, etc."

The service, which is currently being trailed and will be available in October, has signed up Reuters, Dun and Bradstreet and Equifax as content providers. Music partners are expected to be announced later in the month.

However consumer scepticism about online shopping is a major hurdle, according to a survey by a consortium of international consumer organisations. As well as fears over security the study, carried out by Consumers International, found that there's some way to go before online retailers are trusted as efficient and reliable.

Delivery of goods was slow -- with some never reaching their destination -- and nearly half of Web sites investigated had no policy on returning goods. Also, many sites failed to give clear information about delivery charges.