Instead of using a telephone, a normal card reader, and a customer’s signature, one leading Internet payments company has devised a secure method of allowing a bank customer to shop on-line with a credit card, by never releasing “in the clear” the customer’s credit card number on the Internet itself. Instead, the company only releases the credit card number and a merchant’s request for payment to the customer’s issuing bank, away from the Internet, after verifying on-line with the customer that the purchase was authentically made. The bank processes the transaction as it would any other credit card purchase; the value added by the company is that the customer’s credit card number is never on-line, a benefit indeed in today’s security-poor Internet. It is not hard to imagine that another step in this direction is for a third-party organization (perhaps even a bank subsidiary) to issue secure, encrypted electronic checks on the Internet on behalf of bank customers, or even unaffiliated parties, wishing to make purchases on-line. Much legal uncertainty remains in the United States about establishing such a process, however. Basic questions remain unanswered. What, exactly, would be an authorized signature on an electronic check? Put another way, what types of entities would be authorized to act as certification authorities on the Internet for such commercial conveniences as electronic purchase orders, electronic negotiable instruments, or their bases, digital signatures? Would these 11  See 12 C.F.R. Part 205.
Being a modern bank, it conducts business principally on the Internet. IIB has a series of quite attractive Internet pages where its products are offered. These pages spell out the products, deposit terms and interest rates, and loan terms and interest rates. All agreements are governed by the law of Atlantis. All deposits are deemed received over IIB’s “counters” in Atlantis, and all loans are paid out of Atlantis. Atlantis has an enjoyable ambiance even exceeding that of Nice and Saint Paul de Vence; therefore, I see no need to leave the island. I do receive and entertain customers when they visit Atlantis. I do place telephone calls to customers who have responded to my Internet page, but I do not make cold calls to customers. Communications with customers over the Internet are state-of-the-art secure. Customers receive account statements over the Internet, issue payment instruments to IIB over the Internet, and request loans over the Internet. All payments to and from accounts are made by wire transfer to IIB’s correspondent account maintained on the books of Atlantis Bank, the only bank chartered under Atlantis law authorized to engage in banking transactions with Atlantis residents. Customers may instruct IIB to make payments for their account. These too are consummated by means of payments out of IIB’s account at Atlantis Bank. Loans are disbursed and paid the same way. The question presented is whether IIB is violating the law of the countries in which its customers are located.