Chapter 123: WPAY
Chapter 123: WPAY
The development of WPAY itself was going relatively smoothly. The program structure itself was not especially complicated, whether in the external interface or the actual operating backend.
The only real issue was security technology, but by the standards of this era, Parallel Soft’s network and security technology was at a fairly high level.
“An encryption algorithm?”
Jaden, the security engineer, came over after receiving a cooperation request from the WPAY Business Team.
“Yes. After all, we probably can’t completely prevent data from being leaked.”
Casey had tried developing a security system internally in his own way, but since he did not have knowledge in this area, it was difficult. And the given schedule was not relaxed enough for him to start studying it from scratch now.
“Well, authentication and logins are one thing, but if payment information leaks, that would be a serious problem.”
As a former hacker, Jaden was almost instinctive when it came to finding these kinds of holes, so he quickly identified the most dangerous parts.
“Would it be possible? I know there’s something called DES, but that feels a little uneasy.”
DES was the American standard encryption algorithm used at the time, a symmetric-key encryption system that used a 56-bit key, or 64 bits if the 8 bits for error detection were included. The problem was that DES was already suspected of being insecure even at this time, and while it had not happened yet, it would soon be cracked by equipment made by the EFF, the Electronic Frontier Foundation.
(Translator’s Notes: DES — Data Encryption Standard. A symmetric-key encryption algorithm adopted as a U.S. federal standard in the 1970s. Its 56-bit key later became vulnerable to brute-force attacks as computing power improved.)
(Translator’s Notes: EFF — Electronic Frontier Foundation. A U.S.-based digital rights organization founded in 1990. It famously built the “Deep Crack” machine in 1998 to demonstrate that DES could be broken.)
“That’s true. DES is a bit... Understood. I’ll try it.”
If AES existed, they could simply use that, but AES would only come out in 2001, so for now, they had to create their own security algorithm.
(Translator’s Notes: AES — Advanced Encryption Standard. A symmetric encryption standard adopted in 2001 to replace DES as a stronger modern encryption algorithm.)
Fortunately, Jaden was skilled enough that he managed to develop a security algorithm without falling behind the development of the other modules.
The problem lay outside development.
First of all, negotiating with the card companies was not easy.
“Internet payments?”
“Yes. We use email for personal authentication and implement something similar to a POS terminal through a computer program to process payments.”
“...I’m not quite sure I understand.”
At the time, card companies were conservative financial institutions. Credit cards might have been innovative when they first appeared, but that was already decades ago, and they had generated stable profits through the same systems and methods all this time, so they had completely hardened into place.
“So you mean you will handle our customers’ information on our behalf?”
“Yes. Of course, there are risks, but it is much more convenient, and we plan to establish a top-level security system.”
“I’m not sure...”
There were also security issues. Parallel Soft was already aware of them and was using every available means to build security measures, but it was difficult for the card companies to even understand these explanations. The idea that an unfamiliar new service on an unfamiliar system called computers and the internet would handle customer information felt like an enormous risk to them.
Because of that, Parallel Soft’s negotiation staff, including Seongcheol, went through considerable difficulty.
The only fortunate thing was that some card companies were progressive.
Companies like Capital One and Discover Card were examples. In particular, Capital One had already adopted a data-based personalization strategy and was attempting customer segmentation, risk analysis, and customized marketing strategies.
(Translator’s Notes: Capital One — American financial services company known for credit cards, banking, and data-driven customer targeting.)
(Translator’s Notes: Discover Card — American credit card brand launched in the 1980s, known as a major card network and issuer.)
Of course, this was not like the big data analysis that would appear later. It was a method where people personally analyzed data with the help of simple programs like spreadsheets, but by the standards of this era, it was quite progressive.
“...Very well. But you must comply with the conditions.”
“Of course!”
They were progressive, but negotiations even with these companies were by no means easy.
Still, Parallel Soft persistently analyzed the other party and continued trying. By presenting detailed conditions such as transaction data access rights, brand exposure and joint marketing, compliance with risk management and security standards, and sharing legal liability, they were able to form partnerships with several companies.
In truth, WET’s recognition played a major role here. After all, a progressive card company with some understanding of the internet era could not possibly fail to realize how much influence America’s number one portal site had over internet users.
Aside from the difficulty of these negotiations, there were also legal issues.
“It may possibly be regarded as banking or financial business.”
A Black man with strikingly thick flesh under his chin spoke to Seongcheol with a serious expression. He was Malcolm D. Hayes, a newly hired member of Parallel Soft’s legal team.
Having just turned thirty this year, he was a Harvard-educated lawyer. Parallel Soft had already been planning to create a legal team since the company had grown larger, and with the WPAY matter requiring legal review, they newly hired him.
“Then wouldn’t we need some kind of qualification?”
“Yes. Moreover, this license can become troublesome because the requirements differ from state to state.”
“Can’t we avoid it? But our service is only acting as a payment agent. We’re not actually remitting the money ourselves, are we?”
“Yes. We need to clearly specify that point.”
Seongcheol and the legal team avoided whatever they could avoid, and for the parts that seemed unavoidable, they prepared the documents as quickly as possible to get the service ready.
Then, on July 19, 1996, Parallel Soft launched WPAY.
However, despite launching such a groundbreaking service, there was no great response.
That was only natural, because there were still very few cases of people making monetary transactions online.
E-commerce had only just begun, and there were still not many services provided through the internet.
Of course, even if there were not many, they still quickly tried to form partnerships.
“We need to make it support not only BidBarn, but other online markets too, and if possible, even places like home shopping.”
“Ah! That makes sense.”
Even though Insu did not explain further, Seongcheol immediately understood the reason. At first glance, it might seem like they were helping competitors, but the story was different if they valued WPAY highly.
First, even if other markets used it, WPAY would still receive fees, so it would generate profit. And unless people in the world were fools, it was only a matter of time before they realized WPAY’s usefulness, so similar services would definitely appear.
If they secured as many places as possible using WPAY before that happened, they would be able to compete against later entrants more comfortably.
“Right?”
“Yes. Exactly.”
And naturally, they also registered WPAY as a payment method for TLF Online’s usage fees. Even before this, online card payments were not impossible, but users had to enter their card information every time, which was inconvenient and risky in terms of security, so not many people used them.
But WPAY was not completely without weapons it could use.
Just like early PayPal, it used its remittance service as its main marketing tool. At this time, sending money to another person was extremely inconvenient.
The most common method was bank transfer, but this was an era without online banking, so people first had to go all the way to the bank.
<You can send money immediately as long as you have the other person’s email address. However, it must be an email registered with WPAY.>
Yet WPAY made remittance easier than even online banking decades later.
“Huh? That’s really it?”
Miles Carter, a young man living in New York, had become interested after hearing that WET had released a new service.
Then, while short on game money in TLF Online, he tried a real-money trade. The other party said he also had a WPAY account, so Miles decided to try it. Honestly, since it was a new and unfamiliar system, he did have some doubts, but since it was only a ten-dollar transaction, his curiosity was stronger than his suspicion.
[Okay, I got it. Log into the game.]
But it really worked just like the advertisement displayed on WET. He logged into his WPAY account, entered the other person’s email address, pressed the send money button, and received a transfer completed message. Not long after, a WTALK message arrived saying the other person had received it.
Miles hurriedly logged into the game, received gold from his TLF Online friend named “Denden,” and became completely convinced about WPAY.
And aside from cases like Miles, WPAY also showed strength in overseas remittances.
At the time, overseas remittance through banks took a long time and, more importantly, cost a lot of money. It usually took three to five days, and the fee alone cost between twenty and forty dollars.
But that was not the only fee. There was also a ten-to-thirty-dollar cost for using the international financial communications network, and if the bank did not have a direct remittance system, the money had to pass through an intermediary bank, adding another ten to twenty dollars. In some cases, though not always, the final receiving bank also charged another ten to thirty dollars.
There were also currency exchange fees, but WPAY had to pay those too, so there was no need to count them separately.
By comparison, WPAY was much faster at one to three days, and if users paid an additional fee, immediate remittance was also possible. In truth, this immediate remittance worked by WPAY advancing the money first, so it could be considered a kind of loan.
However, since WPAY’s remittance was based on credit cards, its fee was percentage-based. If the remittance amount became high, WPAY could actually become more expensive. But unless it was a fairly large sum, WPAY was cheaper.
Currently, the fee was 2.9 percent plus a fixed fee of thirty cents, though no one knew how it would change in the future.
And Parallel Soft was also preparing cooperation with banks to lower even those fees.
For now, the banking sector was taking a negative position, but if WPAY continued gaining attention and growing as it was now, they would eventually change their attitude.
“They pulled it off.”
Insu felt a thrill as he watched PayPal, in other words WPAY, succeed in development, then somehow successfully launch after his father and mother worked hard on it, and finally begin being used all across the internet.
After all, PayPal was already highly valued even now, but it was a company that grew larger and larger as time went on.
At its peak in 2021, its market capitalization rose to a staggering 310 billion dollars, reaching a level near the top three in the American stock market, similar to Apple, Microsoft, and Amazon.
Of course, to reach that point, they would have to crush all competitors and continue expanding their service area, so it could not be said that they would naturally arrive at that level just by continuing like this.
But in any business, especially in IT, the first-mover effect was extremely large. Moreover, WPAY had been developed two years earlier than PayPal.
So as long as no major collapse occurred according to the vision Insu had planned, he believed it would at least be able to reach the 1.5 billion dollars in value PayPal had when it was acquired by eBay without much difficulty.
He did not know about his own ability, but considering the ability his father and mother had shown so far, the two-year lead over PayPal, and the corporate background and support of Parallel Soft, he judged that much should be possible.
But then a thought suddenly occurred to him.
Since I brought this over, does that mean someone like Elon Musk won’t appear?
After all, the foundation that allowed Elon Musk to do major businesses was the money he earned from succeeding with PayPal and selling it to eBay.
Of course, there was no guarantee the same thing would happen in this world, and he did not underestimate Elon Musk’s ability so much that he would call this his only key. But it was such a famous event that the thought naturally came to mind.
Since it’s Elon Musk, he probably would have succeeded somehow.
If he failed to earn as much money as he had from PayPal, and that success was not enough for him to pursue the space business or electric vehicle industry he later worked on, that would feel a little unfortunate.