CyberCash

CyberCash, Inc. was incorporated in DelawareDelawareDelaware is a U.S. state in the Mid-Atlantic region on the East Coast, with its capital at Dover and Wilmington as its largest city. On December 7, 1787, it became the first state to ratify the U.S. Constitution, entering the Union as the 1st state, and it had a population of 989,948 in the 2020 census (April 1, 2020).Open the full entry on August 29, 1994; its annual report says the company was founded in August 1994, with headquarters in Reston, Virginia. The report lists William N. Melton, Daniel C. Lynch, Bruce G. Wilson and Stephen D. Crocker each as a founder of the company.⁠[1]

A 2021 Internet Hall of Fame article says that Daniel C. Lynch brought together Bill Melton, the founder of Verifone, Steve Crocker and Bruce Wilson to launch CyberCash; Lynch said, “I knew the Internet would fail if we couldn’t move money on it.” A March 1995 Washington Technology article says the company was founded to facilitate electronic commerce on the Internet.⁠[2][3]

In August and September 1994 the company sold 1,450,000 shares of common stock for $145,000 in total: $100,000 in cash, $29,400 in notes receivable bearing 8% interest and due August 29, 1999, $15,000 for a technology license and $600 in services. In August 1994 it also issued, for services valued at $11,250, rights to buy up to 112,500 shares of common stock at $0.10 per share, which were fully exercised in 1995.⁠[1]

Under a stock purchase agreement of October 1994, CyberCash sold 2,500,000 shares of Series A preferred stock at $2.00 per share. In August and September 1995 it issued 2,200,000 shares of Series B preferred stock at $5.00 per share, together with warrants, sold for about $91,000, to buy up to 181,818 Series B shares at $5.00. The annual report says the company’s president and chief executive officer served, at the time of the financing, on the board of directors of a company that took part in the Series B financing, and that two companies that took part in it had designated representatives to the company’s board.⁠[1]

In December 1994 Wells FargoWells FargoWells Fargo & Company is an American bank whose employees opened millions of unauthorized accounts, leading to regulatory penalties and a $1.95 trillion asset cap from the Federal Reserve that was lifted in June 2025.Open the full entry & Co., based in San Francisco, was to work with CyberCash on a secure way to complete online credit card and other transactions over the Internet, and planned to test the CyberCash system with a small group of its merchant customers early in 1995. A Washington Technology article of March 23, 1995, says the pilot with Wells Fargo Bank was starting that month and that, if it succeeded, the service would reach other banks by the end of the second quarter of 1995.⁠[4][3]

In March 1995 the Reston start-up had 25 employees and positioned itself as an electronic middleman among consumers, merchants and banks, handling the security, privacy and validity of transactions. It offered consumers software for shopping on the Internet with credit and debit cards; its first service handled credit card purchases, with a CyberCash server passing orders, invoices, card numbers and authorizations among consumers, merchants, banks and credit processing centers. The company used encryption software from Trusted Information Systems, Enterprise Integration Technologies and RSA Data Security as well as the banking industry’s “digital encryption standard”, and its partners included Transaction Network Services (TNS); Magdalena Yesil, vice president of marketing, said that America OnlineAOLAOL is an American internet brand offering a news portal, email, and membership services. Its history dates to an online-services company founded in 1985.Open the full entry and other major online services wanted to combine CyberCash software into their interfaces.⁠[3]

The electronic cash the company planned would use anonymous, non-interest-bearing CyberCash accounts at participating banks: users would move money between their bank accounts and these accounts and then spend or receive electronic cash online, with the software verifying that real money backed each transaction; the target was transactions too small for credit cards. Yesil said CyberCash would roll out electronic cash in 1995, begin to realize volume in 1996 and start hitting its stride by 1997, and expected millions of users. She said, “It’s like sending a check over the Internet, but unlike a check, electronic cash never bounces,” and named “the cash in people’s pockets” as probably the biggest potential competitor.⁠[3]

The same article names MicrosoftMicrosoftMicrosoft is a technology company founded by Bill Gates and Paul Allen in 1975 and headquartered in Redmond, Washington, with businesses spanning Windows, Microsoft 365, Azure, enterprise software, artificial intelligence, gaming and devices.Open the full entry, VisaVisaVisa Inc. is one of the world’s leaders in digital payments, with roots going back to 1958, and is headquartered in San Francisco, California.Open the full entry, MastercardMastercardMastercard Incorporated is a technology company in the global payments industry whose principal operating subsidiary was formed in November 1966. It is headquartered in Purchase, New York.Open the full entry and Netscape Communications as CyberCash’s competitors in credit card transaction security; Yesil argued that Visa, Mastercard and Microsoft were not true competitors in electronic cash and could collaborate with CyberCash.⁠[3]

In April 1995 CyberCash’s system for protecting credit card payments on the Internet went into operation; Marvin A. Sirbu, who holds a joint appointment at Carnegie Mellon UniversityCarnegie Mellon UniversityCarnegie Mellon University (CMU) is a private research university in Pittsburgh, Pennsylvania. It grew out of the Carnegie Technical Schools, founded with funding from Andrew Carnegie in 1900, which were renamed the Carnegie Institute of Technology in 1912 and took the present name after merging with the Mellon Institute in 1967. The university is known for computer science, robotics, engineering, and the arts, and has campuses in Qatar, Silicon Valley, and Rwanda. As of September 2025, it enrolled 16,582 students. Its current president is Farnam Jahanian. On September 30, 2026, the university announced a $3 billion gift from Ken Griffin and plans to build a new campus in Miami.Open the full entry, calls it one of the first of its kind in an IEEE Spectrum article. The system offered Internet users a payment tool called a “wallet,” which stored consumers’ credit card numbers in secure software and transmitted them to a merchant when the consumer authorized a purchase.⁠[5][6]

CyberCash’s credit card payment protocol was first posted as an Internet-Draft on July 8, 1995. In February 1996 D. Eastlake 3rd, B. Boesch, S. Crocker and M. Yesil of CyberCash published it as RFC 1898, “CyberCash Credit Card Protocol Version 0.8,” in the Informational category; the memo states that it does not specify an Internet standard of any kind. It calls CyberCash’s system one of the few operational systems in the rapidly evolving area of Internet payments; versions 0.7 and 0.8 were the test and initial shipped versions of the credit card system, version 0.8 covered credit card payments only, and cash facilities were planned for versions 0.9 and 1.0.⁠[7]

CyberCash’s Secure Credit Card service, a credit card transport service, was commercially released in January 1996. That month CyberCash teamed up with VeriSign, Inc.VerisignVerisign (VeriSign, Inc.) is a domain name registry operator headquartered in Reston, Virginia, that provides registration services and authoritative resolution for the .com and .net top-level domains and operates two of the 13 global internet root servers. In 2026 ICANN approved its request to discontinue third-level .name registrations, under which about 22,000 existing third-level names are to be deleted.Open the full entry to add a digital identification feature to its electronic payment product, to enhance the security of consumer purchases on the Internet.⁠[1][6]

The board approved a one-for-two reverse stock split in December 1995, effective February 9, 1996. On February 15, 1996, CyberCash sold 2,760,000 shares of common stock in its initial public offering at $17.00 per share, with net proceeds of about $42,835,000; the stock traded on the Nasdaq National Market under the symbol CYCH.⁠[1][8]

Concurrently with the offering, SOFTBANK Holdings, Inc. bought 976,540 shares of common stock in a private placement at $15.81 per share, for about $15.4 million; one passage of the 1996 annual report dates the purchase February 21, 1996, while the purchase agreement in its exhibit index is dated February 15, 1996.⁠[1]

At the offering all Series A and Series B preferred shares converted into 4,700,000 shares of common stock, and the holder of the Series B warrants exercised them net of the shares needed, at the offering price, to cover the $5.00 exercise price, receiving 128,342 shares of Series B preferred stock that were immediately converted into 128,342 shares of common stock. The 1996 price ranges (high/low) were $64.50/$24.50 from February 15 to March 31, $64.75/$28.75 in the second quarter, $54.75/$23.50 in the third quarter and $40.50/$20.75 in the fourth quarter; the closing price was $23.00 on December 31, 1996, and $13 1/16 on February 14, 1997, with 201 holders of record.⁠[1]

CyberCash’s CyberCoin small-payment service was commercially released in September 1996. It was an electronic coin for small Internet purchases that drew funds from the consumer’s bank account, for purchases of 25 cents to $10, and was the second payment option in CyberCash’s Internet wallet, which had previously been used mainly for credit card purchases.⁠[1][9][5]

As of December 31, 1996, about 330 merchants were using CyberCash’s CashRegister merchant software; the company had 220 employees, 158 of them in the United States. It had established a development subsidiary in Bangalore, India, and internationally processed transactions for Sligos, a large French processor, and National Bank of Canada. Its principal facility in Reston covered about 43,650 square feet; it also leased about 22,400 square feet in Redwood City, CaliforniaCaliforniaCalifornia is a U.S. state on the Pacific coast; its capital is Sacramento and its largest city is Los Angeles. California was admitted to the Union on September 9, 1850, as the 31st state. Its population at the 2020 Census (April 1, 2020) was 39,538,223, the largest of any state.Open the full entry, and had smaller facilities in Mission, KansasKansasKansas is a state of the United States bordered by Nebraska to the north, Missouri to the east, Oklahoma to the south, and Colorado to the west; its capital is Topeka and its largest city is Wichita. It was admitted to the Union on January 29, 1861, as the 34th state, and its population in the 2020 census (April 1, 2020) was 2,937,880.Open the full entry; North Olmsted, OhioOhioOhio is a state in the Midwestern United States; its capital is Columbus. It joined the Union in 1803 as the 17th state, the first carved from the Northwest Territory, and its population in the 2020 census (April 1, 2020) was 11,799,448.Open the full entry; Melville, New York; Nashville, TennesseeTennesseeTennessee is a U.S. state in the southeast-central United States, with its capital at Nashville. It was admitted to the Union on June 1, 1796, as the 16th state, and the 2020 census (April 1, 2020) counted 6,910,840 residents.Open the full entry; and Bangalore.⁠[1]

From August 29 to December 31, 1994, the company had no revenue and a net loss of $1,153,494; in 1995 it had no revenue and a net loss of $10,006,195; in 1996 it had revenue of $127,439 and a net loss of $26,554,741; its accumulated deficit at the end of 1996 was $37,714,430. Research and development expense was $5,648,052 in 1995 and $14,900,156 in 1996. In early 1997 the PayNow Secure Electronic Check Service was in pilots, with commercial release expected in the second quarter of 1997; a Digital Debit Card was expected the same quarter; and Digital NewsStand was introduced in February 1997.⁠[1]

On March 21, 1997, CyberCash obtained a technology license for NetBill from Carnegie Mellon University in exchange for 120,000 shares of common stock plus warrants to buy another 50,000 shares at $16.45 per share, and agreed to pay a cash royalty of $450,000 over four years; because of uncertainty about the realizability of the license, it recorded a non-cash charge of $2,162,500 for the fair value of the common stock and Class A warrants issued.⁠[8]

Under a joint venture agreement dated May 13, 1997, CyberCash and Softbank Corporation formed CyberCash KK in Japan: a CyberCash subsidiary bought 200 common shares (about 46%) for $83,000, and Softbank and other entities bought 220 preferred shares. In February 1998 the subsidiary sold 10 common shares to another shareholder for about $200,000.⁠[8][10]

On August 5, 1997, CyberCash sold 15,000 shares of Series C convertible preferred stock with a stated value of $1,000 per share to two unnamed institutional investors, for net proceeds of about $14,200,000. In September 1997, 1,500 shares converted into 83,156 shares of common stock; in February 1998, 6,200 shares converted into 607,852 shares, and over 1998 as a whole 13,500 Series C shares converted into 1,303,244 shares of common stock.⁠[8][10]

On October 3, 1997, CyberCash formed CyberCash GmbH in Germany with Dresdner Bank AG and Landesbank Sachsen Girozentrale: a CyberCash subsidiary paid $1,165,000 for 40% of the equity, Dresdner bought 40% and Sachsen 20%. CyberCash licensed its technology to the Japanese and German joint ventures, which provided CyberCoin and CashRegister services.⁠[8][10]

CyberCash licensed its technology to BarclaysBarclaysBarclays is a banking and financial services group headquartered in London, United Kingdom, with Barclays PLC as its parent company. It traces its origins to a London goldsmith bank established in 1690 and developed through bank mergers, overseas expansion and investment banking reorganisations. Its businesses span UK retail and corporate banking, private banking and wealth management, global investment banking and US consumer banking.Open the full entry Bank in the United Kingdom, which operated a version of CyberCoin called BarclayCoin; in early 1999 Barclays Bank plc was also building a payment system using CyberCash technology. As of December 31, 1997, the company had 227 employees, 129 of them in the United States, and its Bangalore development subsidiary had about 100 staff. Revenue in 1997 was $4,487,173 and the net loss $26,221,910, with an accumulated deficit of $63,936,000 at year-end. The company planned to introduce its CashRegister 3 service and to begin providing SET-conforming services in the second quarter of 1998.⁠[8][10]

On February 5 and July 14, 1998, CyberCash issued Series D preferred stock in two placements totaling 30,000 shares with a stated value of $1,000 per share, with options to buy up to 708,382 shares of common stock at $12.80 (exercisable from January 1, 1999, to February 5, 2003), for net proceeds of about $14,409,000 and $14,800,000; by December 31, 1998, all Series D shares had converted into 3,683,276 shares of common stock.⁠[10]

On March 16, 1998, CyberCash reached a non-binding agreement in principle with ICVERIFY, Inc.; the acquisition was completed on April 30, 1998, for $16,250,000 in cash, 2,300,000 shares of common stock valued at $20.50 per share, the conversion of ICVerify options for about $7.0 million and transaction costs of about $279,000, a total given in the 1998 annual report as about $70.7 million including fees. ICVerify’s products were the ICVERIFY and PCVERIFY payment software; CyberCash’s UK and German subsidiaries sold versions for European processors.⁠[8][10][11]

CyberCash’s InstaBuy service was built on the Agile Wallet platform, with First USA Bank the first financial institution to brand it, and Denis Yaro was executive vice president for the InstaBuy service from June 1998; PayNow had been integrated into the CashRegister platform. The company said its merchant base grew about 150% in 1998 and that international joint ventures, alliances and licensing accounted for 13% of 1998 revenue. As of December 31, 1998, it had 337 employees, 215 of them in the United States.⁠[10]

Revenue in 1998 was $12,587,603 and the net loss $30,944,448 ($2.15 per share), with an accumulated deficit of $94,880,788 at year-end; cash, equivalents and short-term investments were $10,903,000 (against $22,002,000 at the end of 1997). Restructuring charges were $608,755 in 1998 and $344,242 in 1997.⁠[10]

Daniel C. Lynch, chairman of the board since the company’s inception in August 1994, held that post until January 1999 and remained a director. William N. Melton, chief executive officer since inception, was president until January 1999 and then chairman and chief executive officer. James J. Condon, chief financial officer since March 1997, became chief operating officer in March 1998 and president in January 1999.⁠[10]

On January 6, 1999, CyberCash sold 609,719 units at $16.40 per unit in a private placement, each unit consisting of one share and a warrant for 0.75 share (initial exercise price $20.00, expiring January 6, 2004), for net proceeds of about $9,980,000; the investors also agreed to buy 304,859 more units for $5.0 million once a registration statement became effective. The 1999 annual report gives the placement as 914,634 units with net proceeds of about $14,779,000 and says the warrant exercise price was reset to $9.7656 on January 6, 2000.⁠[10][12]

By early 1999 CyberCash had stopped offering wallet software downloads and planned to suspend the CyberCoin service in the United States and Canada in the second quarter of 1999, while continuing CyberCoin through its Japanese and German joint ventures and Barclays.⁠[10]

On July 23, 1999, CyberCash completed the acquisition of Tellan Software, Inc. at a total cost of about $11,260,000 including fees, consisting of $1,032,000 in cash and 1,105,024 shares of common stock valued at $9.00 per share, with contingent payments of up to $1,100,000 through 2002. Tellan’s product was WebAuthorize.⁠[12][11]

On August 19, 1999, CyberCash sold 1,643,836 shares of common stock at $9.125 together with warrants for 164,384 shares under a Form S-3 registration, for net proceeds of $14.9 million; on November 15 an institutional investor agreed to exercise 472,254 investment options at $8.27 per share for net proceeds of $3,905,540, and as additional consideration received 472,254 further investment options at $13.345 expiring on November 15, 2004; and on November 19 William N. Melton bought 1,186,240 shares for $10.0 million at the then fair market value. In 1998 Melton had bought 350,000 shares for $3.5 million, and directors Garen Staglin and Michael Rothschild had bought 16,701 shares for $200,000 and 10,000 shares for $100,000.⁠[12]

In 1999 CyberCash had over 20,000 merchant subscribers; the Internet payment service made up about 40% of revenue (up about 90%) and software payment products about 53% (up 65%), with customization engineering of $1,469,000. Total revenue was $20,254,075 and net revenue $19,780,441, the net loss $43,131,505 ($2.02 per share), the accumulated deficit $138,012,293 at year-end, cash and equivalents $18,176,010 and restructuring charges $774,992. As of December 31, 1999, it had 330 employees: 203 in the United States, 118 in Bangalore and nine elsewhere.⁠[12]

In 1999 the company established a relationship with a Hong Kong company for China, Singapore and elsewhere in Asia and contracted with HNC Software for a fraud-scoring service expected in the second quarter of 2000; it also wrote off a $1,000,000 investment in a business that went bankrupt and was dissolved that year, and held an investment in Commission Junction. The stock closed at $13.6875 on March 10, 2000, with 325 holders of record; James J. Condon was then president and chief executive officer and Melton founder and chairman.⁠[12]

In January 2000 an intruder calling himself “Maxus,” an 18-year-old Russian, claimed in an email to InternetNews.com that he had breached the online music retailer CDuniverse.com by defeating ICVerify, CyberCash’s credit card processing application, obtaining more than 300,000 customer records. CyberCash officials disputed this, saying ICVERIFY was a PC-based payment system, not a Web-enabled product, that CD Universe did not use it on its Web site, and that other questions should go to law enforcement officials or CD Universe.⁠[13]

An Irish Times article of January 14, 2000, says the intruder, who called himself “Maxim” and said he was 19 and from Russia, demanded $100,000 from eUniverse Inc., which ran CD Universe, and after being refused released some card files online; he said he had exploited a flaw in the software protecting CD Universe’s financial data and had obtained the ICVerify program and its configuration files by breaking into a chain of shops in 1998. The article says CD Universe employed ICVerify on its site; Brad D. Greenspan, chairman of eUniverse, said the company was not ready to conclude that the blackmailer had manipulated that software to obtain the customer information, that it had begun e-mailing customers about the theft and that it was working with credit card companies on a plan to help customers whose card numbers might have been stolen; an eUniverse executive said the firm had been cooperating with the FBIFederal Bureau of InvestigationThe Federal Bureau of Investigation (FBI) is the federal investigative agency of the U.S. Department of Justice. It grew out of a force of special agents organized by Attorney General Charles J. Bonaparte in 1908, has used its present name since 1935 and is headquartered in Washington, D.C.Open the full entry to catch the extortionist. The article identifies Daniel Lynch as CyberCash’s chairman; he said the company was investigating and that it had found a flaw in ICVerify about a year earlier, issued a patch and notified its clients.⁠[14]

From August 2000 CyberCash’s management explored combining its Internet payment gateway with back-end processing and settlement services; on October 8 it formally retained First Annapolis Capital, Inc., which in early November identified Network 1 Financial Corporation of McLean, Virginia. On November 1 chief executive Jim Condon and chief financial officer John Karnes met Network 1’s founder and chief executive Bill Wade, and the companies signed a non-disclosure agreement on November 3. On December 11, after Condon had resigned earlier in the day, CyberCash’s board approved the transaction by unanimous vote of the directors present, subject to obtaining waivers of certain stockholders’ stock repurchase rights; on December 13 CyberCash and its subsidiary Blue Fish Acquisition Corp. signed the merger agreement with Network 1, and a joint press release followed on December 14.⁠[11]

Under the agreement Network 1’s shareholders were to receive CyberCash shares equal to 50% of the merged company’s fully diluted equity; the combined company would keep the CyberCash name, with headquarters in Reston and operations in McLean; Atlanta, Georgia; San Antonio, TexasTexasTexas is a U.S. state in the south-central United States, with its capital at Austin and its largest city Houston. It was admitted to the Union on December 29, 1845, as the 28th state, and the 2020 census (April 1, 2020) counted 29,145,505 residents.Open the full entry; Alameda, California; Bangalore; and Munich, Germany. William G. Wade was to be president and chief executive, Melton chairman and John H. Karnes chief financial officer, while Daniel C. Lynch, a CyberCash founder and director, would serve as interim chief executive until closing. The release says the two companies processed more than $3 billion in transactions a year for a combined 50,000 merchants and that CyberCash served more than 26,500 Internet merchants and had shipped more than 145,000 copies of its software; Network 1, founded in 1989, was privately held and employee-owned, had about 120 employees and expected more than $24 million in revenue in 2000.⁠[15]

CyberCash filed a Form S-4 registration statement with the U.S. Securities and Exchange CommissionU.S. Securities and Exchange CommissionThe U.S. Securities and Exchange Commission is the federal securities regulator of the United States. Created during the Great Depression by the Securities Exchange Act of 1934 and led by five commissioners, it has a three-part mission of protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation.Open the full entry on December 27, 2000, for a special stockholders’ meeting planned for February 22, 2001, in Herndon, Virginia. In 2000 it launched the FraudPatrol online fraud detection service and an enhanced Internet payment service for business-to-business payments. For the nine months ended September 30, 2000, it had net revenue of $17,092,000 and a net loss of $24,480,000 ($0.97 per share); its stock reached a high of $16.00 in the first quarter of 2000 and closed at $1.72 on December 13 and $0.81 on December 22.⁠[11]

In January 2001 the founder, William N. Melton, resigned. An American Banker article of February 5, 2001, says CyberCash had persistently struggled to find a market and that its latest attempt at revival would proceed without Melton.⁠[16]

On March 1, 2001, CyberCash and Network 1 terminated their merger agreement of December 13, 2000, and signed an asset purchase agreement under which Network 1 would buy substantially all of CyberCash’s assets through a sale under the Bankruptcy Code. On March 2, 2001, CyberCash and its subsidiaries filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware (Case Nos. 01-00622 through 01-00624 (MFW)), and the court ordered joint administration the same day; that day the Nasdaq National Market halted trading in the stock.⁠[17][18][19]

Chief executive Dan Lynch said in the press release that the Network 1 merger was key to the company becoming profitable but that “the financial markets have dried up,” leaving it without the funds to close the transaction; the company said it had sufficient funds to keep operating and that service to more than 27,500 Internet merchants and more than 100,000 software users would continue without interruption.⁠[19]

On March 23, 2001, the bankruptcy court authorized an auction of all or substantially all of CyberCash’s assets. A joint bid by VeriSign, Inc. and First Data won the auction, which the company’s May 9, 2001, press release and Item 2 of its 8-K date April 12 and Item 3 of the 8-K dates April 11. On April 17 the court authorized the sale to VeriSign under a revised asset purchase agreement and recognized VeriSign’s assignment of part of the assets to First Data.⁠[18][20]

The asset sale closed on May 4, 2001: the Internet payment services assets went to VeriSign, Inc. and the software assets to First Data Merchant Services Corporation, for net proceeds of $23.9 million including purchase price adjustments. Excluded were cash, accounts receivable and other financial assets, CyberCash’s interest in CyberCash K.K., a Japanese payment processing joint venture with SoftBankSoftBank GroupSoftBank Group (SoftBank Group Corp.) is an investment holding company headquartered in Tokyo, founded by Masayoshi Son in 1981. Starting out as a distributor of personal computer software, it moved into the internet, broadband and mobile communications, and has since become an investment group centered on AI-related assets such as Arm, the SoftBank Vision Funds and OpenAI.Open the full entry, and its investments in Commission Junction, X.com and Outbounder, Inc. (formerly UUCom), which the company planned to liquidate through later auctions.⁠[18][20]

On May 21, 2001, the company changed its name to CYCH, Inc. while it wound down its affairs; the 8-K filed in the name of CYCH, Inc. on May 31 was signed by Thomas LaHaye, vice president and chief financial officer.⁠[18][20]

Marvin A. Sirbu’s IEEE Spectrum article describes CyberCash as providing consumer software, merchant software and a gateway between the Internet and the authorization networks of the major credit card brands. The consumer’s wallet software handled encryption and transaction records and could register several credit cards; messages were encrypted with a random symmetric key that was itself encrypted under the recipient’s public key, and CyberCash’s public key was built into the wallet and merchant software. When consumers registered a card their public key was stored in a CyberCash database; only CyberCash knew everyone’s public key, and merchants and consumers relied on CyberCash to authenticate signatures.⁠[5]

In a purchase the merchant’s server sent a signed payment request, the consumer chose a card in the wallet and approved the amount, and the encrypted payment message went to the merchant, who forwarded it with its own signed, encrypted description to the CyberCash gateway; the gateway decrypted and compared both messages, submitted a standard authorization request and returned the response. The system also supported refunds, voided transactions, capture and status inquiries. CyberCash operated the gateway as an agent of the merchant’s acquiring bank and so had to be trusted to decrypt payment data; in principle merchants never saw customers’ card numbers, but acquiring banks let CyberCash provide customer records to merchants on request.⁠[5]

RFC 1898 specifies RSA public-key signatures for authentication and DES encryption for privacy: message data is DES-encrypted under a random transaction key, which is RSA-encrypted under a server public key; the hash algorithm is MD5.⁠[7]

CyberCoin targeted low-cost information goods on the Web and used a real-time account database to track transactions; accounts could be funded by a credit card charge or a transfer from a checking account through ACH, debit/ATM networks or other means, with funds available immediately or after up to three days. Merchants delivered encrypted goods and released the decryption key only after payment was confirmed; public-key cryptography was used only to load accounts and set up a session key, and individual transactions were signed with that symmetric key to reduce processing load. The business model assumed banks would offer a bank-branded version operated by CyberCash on their behalf. The article adds that Netscape agreed to bundle the CyberCash wallet software with its browser products.⁠[5]

In early 1997 the CyberCash Wallet consumer software was distributed free of charge, the CashRegister merchant software was distributed free to bank-qualified merchants, and financial institution gateway software processed credit card authorizations and electronic funds transfers. In 1999 the payment software products also included EZCHARGE, NetVERIFY and MacAuthorize. In 2001 CyberCash sold through direct and indirect channels including financial institutions, Internet service providers, application service providers, storefront solution providers and independent software vendors, and ran an affiliate marketing program.⁠[1][12][19]

William N. Melton founded VeriFone in 1981, was its chief executive until 1986 and its chairman until 1992, and in early 1997 was a director of America Online. A 1995 Washington Technology article adds that he founded Real-Share in 1971, provided start-up funds for Transaction Network Services in 1991 and sat on the TNS board.⁠[1][3]

Daniel C. Lynch founded Interop, was director of the Information Processing Division at the Information Sciences Institute from 1980 to 1983 and was a trustee of the Santa Fe Institute; he briefly served as vice president during the company’s formation and in 1999 was also a director of Exodus Communications, Inc. He was inducted into the Internet Hall of Fame in 2019 and died on March 30, 2024; his inductee profile says he went on to found CyberCash, “one of the earliest online payment services for e-commerce.”⁠[1][10][21]

Bruce G. Wilson had held executive positions at NYNEX and held several roles at CyberCash from 1994, including chief operating officer; the annual report of early 1997 lists him as executive vice president for revenue and corporate growth, while that of early 1999 says he had been executive vice president for international operations since May 1996. Stephen D. Crocker had worked at Trusted Information Systems and ARPA and became CyberCash’s chief technology officer in June 1996; his official Internet Hall of Fame biography calls him a co-founder of CyberCash, Inc. and Longitude Systems, Inc.⁠[1][10][22]

Other executive officers in February 1997 were Denis Yaro, executive vice president for products and operations (joined in 1996 from units of Sun Microsystems); Jeffrey S. Irby, vice president for sales and marketing (from January 1997); James J. Condon, chief financial officer from March 17, 1997 (formerly at KPMG Peat Marwick and Legent Corporation); and Russell B. Stevenson, Jr., secretary and general counsel from April 1996. The list of March 1999 also included Nancy C. Goldberg, senior vice president for payments (from October 1998), Thomas P. Costello, senior vice president for development (from June 1998), and Kenneth E. Perez, senior vice president for marketing (from November 1998). In 2000 John H. Karnes was chief financial officer and general counsel and Jill DeGraff Thorpe secretary.⁠[1][10][11]

On the board, Edward R. Kozel, Cisco SystemsCiscoCisco Systems, Inc. is an American networking technology company, incorporated in 1984, headquartered in San Jose, California, and listed on Nasdaq.Open the full entry’ representative on the board (at Cisco since 1989 in roles including vice president of business development, chief technical officer from May 1995 and a Cisco director), and Michael Rothschild, an author and president of The Bionomics Institute, joined in November 1995; Garen K. Staglin, chairman and chief executive of Safelite Glass Corporation and a director of First Data Corporation, joined in July 1996; and Charles T. Russell, president and chief executive of Visa International from 1984 to 1994, joined in August 1997.⁠[1][10]

In March 1995 CyberCash and the Netherlands-based DigiCashDigiCashDigiCash was an electronic cash company founded in Amsterdam by the cryptographer David Chaum. It developed eCash, a payment system that used blind signatures to protect payers’ privacy, and licensed it to banks in several countries for trials; it moved its headquarters to Silicon Valley in 1997, filed for bankruptcy protection in November 1998, and its software and patents later passed to eCash Technologies.Open the full entry were discussing possible licensing agreements; Washington Technology wrote then that DigiCash was the only other company pursuing digital money.⁠[3]

DigiCash bv registered the “CyberCash” mark in the Benelux countries on an intent-to-use basis and applied for U.S. registration on that basis; the U.S. Patent and Trademark Office issued an office action denying the application. In its 1997 annual report CyberCash said it believed it had grounds to challenge the application, while warning that if DigiCash overcame the objection its registration could create rights superior to CyberCash’s; CyberCash had applied to register its mark on the Patent and Trademark Office’s supplemental register and in certain overseas jurisdictions.⁠[1][8]

In 1994 CyberCash licensed technology from an unnamed patent holder for $275,000 plus a 2.5% royalty on related revenue and granted it a conditional warrant for up to 150,000 shares. On January 29, 1996, the licensor gave notice of its intent to sue and demand arbitration, and on April 29 it said it had terminated the license for an alleged breach. CyberCash disputed that grounds for termination existed and said it was not using the licensed technology and had accrued no royalties. The risk factors of the 1999 annual report state that the company had already received notices of claims of infringement of other parties’ proprietary rights.⁠[1][12]

An American Banker column of March 7, 2001, calls CyberCash’s collapse the final implosion of the last major firm still standing among those that helped start the Internet payments boom of the mid-1990s; it says that five or six years earlier young companies such as CyberCash wanted to “own” the online payments space, and that they had visionary founders and advanced technology, credentials that brought them substantial funding for a time.⁠[23]

In a 2021 Internet Hall of Fame article Lynch said of the company, “We had great technology, but lousy marketing.” The article says that when CyberCash was liquidated Lynch and his partners shut it down without harming others’ reputations or careers, and that some of its technology ended up in PayPalPayPalPayPal Holdings, Inc. (Nasdaq: PYPL) is an American digital payments company that operates payment brands including PayPal, Venmo, Braintree, and Xoom, providing online and in-store payments, money transfers, and consumer credit to consumers and merchants worldwide.Open the full entry’s back end, where “the CyberCash name can still be seen in lines of code.”⁠[2]