Product details

First Virtual Holdings Inc (FVHI) is an Internet payments company based in San Diego, California. The company developed a technology by which consumers can securely purchase goods and services over the Internet. Each participating consumer is provided with a ''VirtualPIN'' number, which is used in place of a credit card number to make purchases from participating online vendors. The vendors forward the consumer''s VirtualPIN number, along with the amount of the transaction to FVHI. FVHI then sends an e-mail to the consumer asking for confirmation of the transaction. When confirmation is received, FVHI processes the transaction and pays the vendor. The technology ensures that a consumer''s credit card number is never sent across the Internet. The system is secure but embodies a certain amount of inconvenience as each purchase requires two steps. The company faces strong competition from established industry players such as software developers, banks and credit card companies. In addition, continued consumer reluctance to embrace online commerce has hampered the development of a critical mass of users and thus their progress. A follow-up case (9A98E008) is available.