The main difference lies in the i ncorporation of digital time stamps and signatures that build auditability and accountability into the system and replace the paper trail that's no longer there. With such a system, the payer creates a voucher record that contains a description of the transaction, the names of the payer and the recipient, the date and time of the transaction, and the amount to be paid. The payer signs this voucher with his or her private key. Using a public key, the recipient of a voucher can read the record and verify that it was signed and obliged by the possessor of that private key. The recipient can then submit the voucher to a clearing system and have legal grounds for collecting payment.
Banks provide credit and billing to the customers.
Third-party processors provide verification and collection mechanisms for merchants who accept credit cards. And international networks, such as Visa, connect the processors with the banks for collection. This system is complex, but it's already in place and extends nearly everywhere. Charges to merchants typically run 2 percent to 3 percent of the total transactions made, plus 20 cents per transaction. Several credit-card processors intend to offer their services to merchants on the Internet.