Beenz Counters

By Lev Grossman

If you don't have a beenz in your virtual pocket, maybe you should. beenz (the trademarked word is both singular and plural) are a new kind of money that circulates exclusively on the Internet. There are no beenz coins or beenz bills. The only place you can earn beenz is on the Web, and the Web is the only place you can spend them. beenz are the product of a company called Beenz.com that hopes to make them the currency of the Internet, and they may be the future of cash as we know it. In five years, says Beenz.com founder Charles Cohen, "I believe we'll start to see beenz listed against other major currencies."

Well, maybe. beenz aren't a currency in the strictest sense. You can't go to the bank and trade dollars for beenz, for example, nor will Beenz.com allow you to transfer your trove of beenz to someone else. But beenz are one of the more successful attempts to solve a problem that's as old as the Web, that of finding an easy and safe way for people to spend money online in small amounts. "Right now there isn't really a viable way for consumers to pay for something that costs 50[cents], because that's about how much a credit-card transaction costs the merchant," says Ken Cassar, an analyst with the e-commerce research firm Jupiter Communications. "It's just not economical for online merchants to sell things that cost less than $10 or $20." Early attempts to create a practical alternative to credit cards for conducting financial transactions online have been slow to gain consumer confidence. One such initiative, DigiCash, filed for bankruptcy in 1998, and others have just given up.

Here's how beenz work. First, you open a free account with Beenz.com a New York City-based outfit that's been in business since 1998. You then earn beenz by visiting certain websites that give beenz away as a means of rewarding customer loyalty, in exchange for personal information or as a reward to surfers for just showing up. Hence the name--"You get something just for having 'been' there," explains Beenz.com chairman and CEO Philip Letts. Among the sites that offer this virtual token of their esteem are Excite UK, Dash, FortuneCity and the Motley Fool. Then, once your virtual wallet is bulging, you can spend beenz at any of some 200 e-commerce sites that accept beenz as a form of payment, including Flooz, ishop, Jellybeenz Gifts and MP3.com There are no downloads or credit-card transactions, and Beenz.com keeps track of your account for you. No muss, no fuss.

Cohen founded Beenz.com because he was fed up with existing customer-incentive programs. "I had reward cards and loyalty-card and bank schemes, miles for this, miles for that, thousands and thousands of points, but I had no idea what they were worth. They sent me catalogs, and I didn't want anything in them. It was annoying." He saw an opportunity to give consumers more of a choice in how companies rewarded them for purchases, and to grease the wheels of the burgeoning Internet economy, all in one swoop. Beenz.com launched in March 1999, and by August 150 companies were signed up to accept the new tokens.

beenz is now a global operation, with offices from New York City to Stockholm to Sydney to Hong Kong. And it's getting to be a significant business: in November the company completed its third round of venture-capital fund raising, bringing total investment in the start-up to almost $40 million; its technology partners include such heavy hitters as Oracle, Sun Microsystems and Web-hosting giant Exodus. There are almost 750 million beenz in circulation--roughly equivalent to the currency float of a small country.

The fledgling Web currency still has a long way to go. No major e-commerce site has signed on yet, though Letts says that will change. "We are engaging with most of the Top 10 players," he says. "We have verbal agreements with a couple of them." beenz also faces serious competition. There are dozens of other Web-based customer-incentive programs out there, including ClickRewards, which distributes frequent-flyer miles. There are also competing micropayment schemes in the works, like Trivnet, which automatically lumps your e-commerce bill into your phone or Internet-service-provider bill on a monthly basis.

But don't count beenz out. No other company combines customer rewards with micropayments in quite the way Beenz.com does, and no other company is aiming quite so high. Before the year is out, Letts plans to distribute beenz on cell phones and on MasterCard-backed Mondex smart cards. Beenz.com recently logged its 15 millionth beenz transaction, and Letts predicts--"without a shadow of a doubt"--that this year the company will sign up its 5 millionth customer. By then, who knows how much a hill of beenz might be worth?