The session started with a keynote address by Bill Melton, President and CEO of CyberCash. His talk was titled "Revolution, Warehouses, Boxes, and Bit Bags." He first started by stating that the Internet is indeed a revolution and that Internet commerce was growing at a phenomenal rate. For example, since July 1997, online airline ticket sales were up by 300%, stock transactions by 291% and book sales by 94%, he said, and 24% of Internet users were shopping online.

This revolution would lead to a number of major changes, Melton argued. For example, local warehouses can be bypassed since physical goods purchased online can be supplied directly by the producer. Digital goods like music need no warehouse and can be downloaded as he demonstrated on-screen. Having a secure electronic and digital package requiring a password (digital signature) is also essential to maintain intellectual property rights, he said.

Melton also explained the difference between e-commerce and e-business which Intel and SAP will be creating. For simple e-commerce, there can be a Web site offering an online catalog and security. E-business goes beyond this scope to include catalog management, order entry, shipping and freight, warehousing and inventory management, pricing, account reporting and other commerce-related tasks.

Another feature of e-commerce is money moving via electronic bits between the consumer, the consumer's bank, and the merchant. To the question of whose bag of bits it would be, he stressed that there would not be a single winner.

Melton showed that the existing financial domains used by VISA/MasterCard (SET), Japan Y Coin and others would be able to operate together through the Internet. Thus, their financial domains would retain their individuality but still work together. The future of money is actuarial, and in the wired world it would be account-based.

At the end of his talk, Melton gave a few predictions for future currency:

There won't be a single standard electronic currency. There will be many.

The lines between currencies will be fuzzy.

The number and variety of financial instruments will increase rather than decrease.

To visualize the system will get more difficult, but to use it will get easier.

Several of the panelists then gave a short talk based on the panel discussion theme of "New Development of Electronic Commerce: Scenarios for Economic Structure Improvement."

Bruno Lanvin, world coordinator of the UNCTAD Trade Point Program, presented five e-commerce issues, including free trade for market transparency, getting rid of the middleman, creating seamless global markets, small-time players threatening bigger competitors, and a virtual economy.

Jim Sha, Netscape Communications' senior vice president of commerce solutions, gave a short talk emphasizing that the efficiency of back-end operations of businesses can be much improved. Companies should not only focus on the selling side of their operation, but also the process behind it. Paper-based operations are inefficient and error-prone, he said. The Internet spurs you to "think differently and creatively," he said.

Gary Grant, VeriFone, Inc.'s vice president for sales and marketing in Asia Pacific said the payment-system technologies used with credit cards is already very quick, and money can be transferred far distances. This ideal needs to be transferred to the virtual world, he said. He also mentioned strategic relationships that VeriFone has with companies like Microsoft and Sumitomo Credit Service to enable payments over the Internet. He closed with, "We move the money, that's what we do."

Professor Mitsuru Iwamura of Waseda University's Institute of Asia-Pacific Studies talked about segregation of payments and the positioning of electronic money in the current payment scheme. There is a possibility of e-money used for illegal activities such as money laundering, he said, but most of the attention is on using e-money for small payments.

Some of the other topics brought up at the discussion included:

Melton mentioned that in the U.S., billions of credit card solicitations are sent out, but the return rate is only about 1%. A lot of money is spent for solicitation for a very low return. Banks are still trying to figure out how to get more people to possess credit cards, so they're not ready to promote e-money.

Ira Magaziner, senior advisor to the U.S. president for policy development, stated that privacy guidelines are widely accepted, but the question was how to best enforce them. Europe, which wants government regulation, has a different idea from the U.S., which wants the people to self-govern the Internet. The usual centralized regulation by government would not work on the Internet, Magaziner insisted.

In response to the question of who should manage domain name awarding, registration, root server management, and other Internet administrative functions, Magaziner said that the responsibility is being transferred from the U.S. government to private organizations. Lanvin added that no country can draw up their own rules and force them on everyone.

Magaziner said for e-commerce to flourish in Japan telephone rates would have to be lowered and schools would have to be connected to the Internet. Teacher training would also be necessary, he added.

Sha said that the success stories in the U.S. such as Dell Corp., Cisco Systems and Amazon.com can be replicated in Japan if leaders are willing to take risks to figure out business models.

Melton said Japan has an advantage with a high growth rate of Internet users and Internet service providers.