From...

July 1, 1999
Web posted at: 1:37 p.m. EDT (1737 GMT)

by Megan Barnett

(IDG) -- Shopping online is still harder than it ought to be, at least in part because of the complications involved in paying for the goods you want to buy.

An array of companies have attempted to solve the payment problem with "electronic wallets," software that stores and manages personal data and makes it unnecessary to retype credit-card numbers, addresses and so forth every time you want to make a purchase. To date, e-wallets have not been a great success. But new, improved versions are coming soon. Expect to hear a lot about them.

The next-generation e-wallets will use a newly released standard, the Electronic Commerce Modeling Language. ECML works with any Web-security software and enables electronic wallets to automatically feed customer information into the payment forms of participating merchants.

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Visa, MasterCard and American Express (AXP) are spearheading the initiative, with support from Sun (SUNW) , Microsoft (MSFT) , IBM (IBM) , CyberCash (CYCH) and America Online (AOL) , and e-merchants Beyond.com, Compaq (CPQ) , Omaha Steaks, Reel.com and others.

If it can be widely deployed across merchant sites, ECML will change the rules of the game for electronic-wallet providers. What once was a competitive edge – one-click shopping – will become a commodity. And the proliferation of the standard will lower the barriers to entry into the space. Wallet services from banks, financial-information sites and credit-card companies will likely increase. As a result, independent, third-party wallet providers will have to come up with services beyond one-click shopping to lure customers.

San Francisco-based Brodia.com, formerly Transactor Networks, hopes to do just that. Brodia, which launches its "remote-control shopping" e-wallet this week, helped develop ECML with IBM and Visa after its engineers configured a system to read the various checkout forms and procedures that now exist.

One-click shopping is just a piece of what Brodia's remote-control shopping service will offer. Free for consumers, Brodia's e-wallet can handle multiple credit-card numbers and shipping addresses. It can also catalog a consumer's favorite shopping destinations and options to receive incentives from these destinations. And it lets consumers store receipts.

Ron Martinez, Brodia's CEO, envisions the service expanding to include bill presentment, home banking, weekly grocery orders and multiple forms of payment. "It's a place where you're in charge," Martinez says. "You're able to keep out unwanted marketing by indicating interest for special offers from certain merchants." Banks that partner with Brodia can offer deals on credit cards for specific purchases. Brodia will share revenue with merchants and banks from transactions generated through its service.

Brodia isn't alone in its e-wallet quest. Older electronic-wallet vendors, such as Idealab's eWallet, are working to expand their products' functionality and services. Portals are hoping to capture audiences with similar offerings, though none yet has launched with a set of services comparable to Brodia's. Major commercial banks like Wells Fargo are also examining the space. And Sabeer Bhatia, founder of Hotmail, has unveiled details of his new venture, Arzoo, which is strikingly similar to Brodia.

"We believe 1999 is the year of the wallet," says Steve Ryan, Visa's senior VP of emerging technologies. This version of ECML is just the first of many to come, he adds. As other payment solutions become more widely used, ECML will add those forms to its functionality.

The creation of ECML marks the culmination of what could be a new category in online retailing. The electronic wallet is evolving into a hybrid personal-finance management and direct-marketing tool. Your favorite shops are ready to reward you for giving them real estate in your wallet. People will store not just credit cards, but also cash, coins, checks, ATM cards, receipts, business cards and other personal records in their e-wallets. Add your own personalized shopping mall and you're an empowered online shopper. Which, of course, is just what the credit-card companies want.

The Wallet Market Gets Crowded

Wallet Vendor	Service Details
America Online	Works within America Online shopping only
Brodia.com	Direct-marketing tool, travels with a consumer across sites
CyberCash	Marketed to the CyberCash merchant customer base as an added service
eWallet	Client-based desktop application; shopping bots
Gator.com	Direct-marketing tool, dubbed an "online companion" for storing passwords and credit cards
IBM	Part of the IBM Payment Suite of products for corporate customer
Microsoft	Expected to launch in late summer; details unclear
Trintech	Single card resides on the desktop or a toolbar; multiple-card service can reside on a server or desktop
Yahoo	Works within Yahoo shopping only