The E-Wallet

I love e-commerce, especially during the e-holidays. But I would like to see the process of buying things on the Internet made simpler. I’m not alone: A recent report from Jupiter Communications found that 27 percent of consumers abandon their e-commerce orders before check-out because of the hassle of filling out forms.

One technology that has promised to simplify buying goods on the Internet is the digital wallet. Unfortunately, it’s unlikely we’ll see any breakthrough in this technology soon.

It’s not for a lack of trying. The online wallet has been around for several years, but consumers seem to know nothing about it. A survey conducted by found only 42 percent of online shoppers had heard of the concept and a measly 6 percent said they wouldn’t buy from a merchant that didn’t offer wallet technologies. Many vendors are now trying to improve the visibility of the online wallet.

Microsoft, for one, has an initiative called Passport. Passport tries to relieve the burden of remembering account information for Web sites by sharing a single user name and password among many cooperating sites. It attempts to improve on the earlier Microsoft Wallet technology by allowing customers to avoid tedious re-entry of account, credit, and shipping information.

A digital wallet lets a customer type in credit card and address information once, so that buying something later is as simple as clicking on a card and delivery address. Online merchants can put a Passport icon on their product and checkout pages, allowing a customer to quickly link their stored credit card and shipping address to the purchase.

The Passport strategy sounds great, but there are as many different digital wallet schemes as there are leather wallets. What is needed is a simple, standard method that allows customers to choose whatever kind of wallet we want -- from any vendor -- and use it with any Web site. The standard is ready and so are consumers: Will Internet application vendors succeed in bringing useful digital wallets to market?

ECML (Electronic Commerce Modeling Language) provides a vendor-neutral standard for collecting information during typical electronic purchasing transactions. Any merchant can set up their site to accept input from any ECML-enabled wallet. The standard provides a uniform set of field names and a mechanism that allows merchants to fetch data from a specially formatted repository. The companies committed to the technology have built a Web site ( devoted to the standard.

Microsoft’s Passport scheme is ECML compliant, as is IBM’s entry called Consumer Wallet. Hewlett-Packard’s VeriFone has a plan that emphasizes using the server to encourage wallet technology use. American Express has plans to introduce its own ECML compliant online wallet later this month. Competition is remarkably intense considering few consumers seem interested.

Competition aside, all of the wallets I’ve seen are missing two things: widescale deployment and ease-of-use.

A substantial problem is getting online vendors to install and use the merchant side of the wallet technology. Microsoft and America Online are furiously courting online merchants to become part of their programs. IBM and HP, on the other hand, are using a different approach: targeting banks and credit card companies and hoping this strategy trickles down to consumers. In IBM’s case, each bank has to pony-up a one-time license fee of $50,000 to participate in the program. It’s not obvious how well targeting consumers through their credit card companies will work. Using a far more direct model, Microsoft is giving the Passport scheme to its 40 million subscribers, and America Online’s 18 million users are getting its online wallet.

For some consumers, a problem arises in the way the information is stored. In the Passport plan personal information is stored by Microsoft rather than in a file on a user's hard disk. Another wallet vendor, Qpass, also saves a copy of the consumer information and shares data on buying habits with other organizations. Wallet vendors respond by saying they are especially sensitive to privacy concerns and have far more secure facilities than any individual.

When you consider the fact that wallet software is still user-belligerent it leads to a puzzling conundrum: In an environment where consumers are wary about sharing even a single credit card number, e-commerce vendors still want us to give them our whole wallet. --Mark McFadden is a consultant and is communications director for the Commercial Internet eXchange (Washington). Contact him at

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