The service, called Chambersign, has been launched by the Chamber of Commerce in conjunction with nine other European Chambers of Commerce, providing a set of digital certificates that can be used by small businesses wanting to trade online.
Companies subscribing to the scheme will pay £50 a year, and will be reimbursed in the form of a £50 discount for electronic VAT returns.
The system will work using Viacode, a digital certificate system from the Royal Mail. Peter Taylor, managing director of the Viacode project, explains that it started about four years ago as a research project exploring the possibilities of public key infrastructures (PKI).
The Royal Mail wanted to capitalise on its branding, and the research project led to a pilot system that set up Viacode and the Royal Mail as a trusted third-party certification authority.
The Chamber of Commerce recognised that if they could set up digital certificates for their members, it would remove a local bureaucracy, claims Taylor.
"The first thing we are doing is acting as a notary on export documentation," he says.
Taylor argues that 60% of small businesses are involved in exports, and have to get their documentation stamped and received by Customs at their destination.
"That can be done electronically, reducing it from 15 hours work to two."
Businesses engaged in the project can also use their certificates to file VAT returns, and any other paperwork requiring a signature.
Taylor says companies will be able to file their tax returns with the Inland Revenue using Viacode certificates by September.
Although he would not reveal too much technical detail about his system, Taylor explains that it is based on certificates software from Entrust. The X.509-compliant certificate system is backed by a directory service from Peerlogic. Taylor believes he has an advantage over the other digital certificate authorities such as VeriSign and Globalsign, because of the Royal Mail's trustworthy image.
But it isn't the only option for companies wishing to trade securely online. A collection of financial institutions clubbed together last year to form Identrus, a profit-making concern dedicated to providing secure trading facilities online.
Tier one institutions grant second-tier institutions the authority to issue certificates to their end-user customers, and also provide a network of e-commerce services such as transaction management for members of the network.
Taylor explains that he has not signed Viacode up to the Identrus network because he doesn't have a clear idea of the charging structure.
The announcement is particularly timely, given the ongoing progression of the Electronic Communications Bill, which will confirm the legal admissibility of digital certificates used within an e-commerce environment.
Nevertheless, Dennis Keeling, chairman of the Business & Accountancy Software Developers Association, argues that initiatives such as Chambersign may be putting the digital cart before the electronic horse.
Keeling's organisation has been doing a lot of work with the Inland Revenue and Customs & Excise. When Keeling started the work, he thought he would use PKI, but as the work progressed, research showed that no customers were using it.
Only two or three people out of 200 in Keeling's roadshows said they were involved in using digital certificates. "You have the Chamber of Commerce jumping up and down and making these announcements, but there's no take-up," Keeling argues.
He says most companies are happy to use "challenge and response"-type password authorisation, rather than digital certificates.
If Chambersign is to work, it will need a huge push from the UK government to persuade companies they need it, and to stop them using other certificate systems for electronic trade.
Nevertheless, it is a step in the right direction, and if nothing else, it will encourage small businesses to think seriously about the benefits of business-to-business e-commerce.
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