Microsoft Launches New E-Wallet

Giving up on its Passport online checkout function, Microsoft launched a brand new MSN Wallet service for shoppers seeking a fast and easy checkout mechanism that remembers their credit card and shipping address data from one e-commerce site to another.

A slew of name-brand partners, including upscale department store chain Nordstrom, signed on as the first retailers participating in the new e-wallet program.

The software giant said it plans to discontinue the separate shopping service called Passport Express Purchase, that is linked to its Passport online authentication platform.

Passport is a free service that authenticates users' identities, allowing them to move seamlessly within partner sites and make purchases without having to re-enter information.

Consumers who now use Passport Express Purchase and who want to transition to MSN Wallet will need to sign up for the new service separately. No information will be transferred between the services, Microsoft said, and all information in existing Passport Express Purchase accounts will be destroyed after the service is shut down.

Retailers affiliated with the new MSN Wallet, a free service that automatically enters personal information on checkout forms, will include Kmart, OfficeMax, RitzCamera.com, Blue Nile, Godiva Chocolatier, Fossil, The Sports Authority and Fogdog, in addition to Nordstrom.

Microsoft said the existing Passport shopping service will run through next March, giving merchants time to get through the holiday season without having to make changes to their site. But consumers can start signing up for the new wallet service now at the MSN portal -- using a Passport account to sign in. Initially available in English, MSN Wallet eventually will support other languages, including German, French, Japanese and Spanish.

On the security side, Microsoft said that payment and address information for the new wallet service is electronically encrypted and "stored in a database on servers that are located in access-controlled facilities."

"Many other safeguards further enhance security," Microsoft said, including "comprehensive data filtering before it enters the system and an industry-standard encryption method (triple DES) that is designed to help prevent anyone but the intended retailer from decoding and reading transmitted information."

"Consumers want online shopping to be as simple and dependable as sending e-mail," said Jim Barr, general manager of MSN Shopping. "With MSN Wallet, we're providing a new level of convenience and reliability ..."

The e-wallet concept in general has met with mixed success online, due both to security concerns and privacy worries.

Just last month Redmond, Wash.-based Microsoft agreed to 20 years of independent, third-party audits of the Passport identification and authentication system to settle Federal Trade Commission charges that the company falsely misrepresented the privacy and security of personal information collected from consumers through Passport.

The FTC ruled that Microsoft misled consumers by overstating the security level of Passport and also misrepresented its privacy policy when it collected and held, for a limited time, a personally identifiable sign-in history for each user.

Meanwhile, Microsoft reportedly has begun making some changes in its basic Passport operation aimed at alleviating consumer complaints about the service, including complaints that it's too easy to create accounts with phony e-mail addresses and that it's too hard to cancel an account. Users began receiving e-mails advising them of the changes over the weekend.