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Microsoft to launch shopping Wallet for consumers

Microsoft to launch shopping Wallet for consumers

Microsoft said it will launch a new service this week called Passport Wallet, which allows consumers to store credit card, billing and other information at a single location and use it to shop at multiple online stores.

The goal is to save users the hassle of re-entering their personal data at each site where they shop, and so encourage them to do more shopping online, Margie Miller, a product manager with Microsoft's Consumer and Commerce Group, said Friday.

Microsoft will also announce that more than 50 companies have signed up to use the service on their e-commerce sites, including barnesandnoble.com, Buy.com, OfficeMax, Costco Wholesale and Canadian bookstore Chapters Online, Miller said.

The user information will be stored on servers hosted by Microsoft. When a customer wants to buy something from a participating site they click on a link to open their wallet page and select the information they want submitted. Microsoft encrypts the data and sends it to the merchant for processing.

The service builds on Microsoft's existing Passport service, which has been available since July and allows users to access sites on the Microsoft Network, such as MoneyCentral and MSN auctions, using a single login. Forty million users have signed up so far for the Passport service, according to Miller.

Although Passport Wallet will be free for consumers to use, online stores that participate will be required to pay Microsoft a flat fee. The fee will range from a few hundred dollars per year for smaller sites, to "the low six figures" for companies that generate a lot of traffic, Miller said. The fees will be waived through March 2000 to encourage more firms to sign up, she added.

Passport Wallet is part of a broader strategy in which Microsoft is seeking new sources of revenues by providing Internet firms with building blocks for creating services on their Web sites. The plan to offer such building blocks, or what Microsoft calls "megaservices", was outlined by company president Steve Ballmer in San Francisco last month.

To succeed with Passport Wallet, Microsoft will need to convince users that their sensitive data will be well protected. The data will be stored on Microsoft's Hotmail servers in California, Miller said. Those servers were recently subjected to a highly publicised attack that exposed users' e-mail. "The recent attack had nothing to do with Passport," Miller noted.

Security has been beefed up since the Hotmail hack, and all data transferred to merchants will be securely sent using SSL (secure sockets layer) encryption technology, she said. "Users will be in control of their information, and there will be no information sharing" among the online merchants that take part in the service, she added.

The idea of storing the data on a central server rather than on a user's home PC is to enable them to shop from a PC at work, or when they are on the road using a smart phone or a handheld computer, Miller said.

Merchants that use the service will have to display a privacy policy on their site that tells users how any information they submit will be used, she said.

Passport Wallet will compete with a similar service unveiled by Novell at Internet World last week, called digitalme, as well as services from other firms that offer single-login shopping services.

"What distinguishes this is how easy it is to implement and how easily they can customise the service," Miller said.

Users can open a Passport Wallet account at http://www.passport.com. The profile must include a name, e-mail address, country, region and zip code. Users have the option of supplying other information such as their age, nationality and language preference that sites would be able to use to offer more targeted services.

Passport Wallet isn't limited to users and businesses in the US. The passport.com site has already been localised for French, German and Japanese, and will support 27 languages altogether by the end of the year, Miller said.

While Passport Wallet is initially for consumers, Microsoft is exploring the possibility of offering the service for companies to use for business-to-business commerce, Miller said.

Other "megaservices" that Microsoft has said it will provide to Internet companies to create services on their site include LinkExchange, a system for exchanging banner ads, the Hotmail e-mail service, the Instant Messenger communications service and Windows Update, a system for offering software updates and patches online.

Miller said the "megaservices" strategy isn't such a radical departure from Microsoft's traditional business model.

"In some of our divisions we've sold software to create applications. Now it's software to create services," she said.


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