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IBM markets new e-wallet for quick checkout

by Dorte Toft


(IDG) -- IBM is making a second attempt to promote its electronic consumer wallet for business-to-consumer commerce. The company has released the IBM Consumer Wallet Version 2.1, targeted at merchants who want to minimize the number of abandoned virtual shopping carts.

Twenty-seven percent of consumers abandon their online carts when faced with having to fill in all the necessary payment, shipping and billing information, IBM officials said, citing research published by Jupiter Communications in February 1999.
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By using the IBM Consumer Wallet, a click on the icon on the desktop takes care of the whole job, making the checkout process faster, Ed Kilroy, general manager for electronic commerce at IBM Software Solutions, said in a teleconference. The one-click transaction is possible because IBM has employed the ECML (Electronic Commerce Modeling Language) standard. The standard was put forward in June of this year by a range of companies, including the major credit card companies.

ECML is based on a set of uniform field names that streamlines the process by which merchants collect data for payment, billing and shipping. Several online merchants have already publicly declared their support for the ECML standard.

Several other wallet vendors are on their way with ECML-based wallets, according to Andrew Bartels, senior electronic commerce research analyst at Giga Information Group. However, he doesn't expect the one-click routine to make that much of a difference to consumers.

"It is just a means of addressing a small barrier to Internet commerce," Bartels said.

For him, the significance of IBM's announcement lies in the technology that levels the competitive e-commerce playing field. For example,, which offers one-click buying after customers have entered all the routine information about payment and shipping, can now be challenged by "Jim's Bookstore" and other small shops, Bartels said.

IBM, which previously marketed its e-wallets though financial partners such as banks, is partnering with MasterCard International this time to reach the same customers. IBM and MasterCard are hoping to get the product out on the market in large volumes and in time for the Christmas buying season.

MasterCard will market the Wallet to its 23,000 financial customers, said Art Kranzley, senior vice president for e-commerce at MasterCard. Banks can brand the e-wallet with their own name and, when the wallet icon is activated, they can get banner advertisements displayed along with links to their own Web sites.

IBM's first attempt with the Consumer Wallet, Version 1.2., failed in the U.S. because the company restricted its use to transactions conducted with a rather complex secure payment standard, SET (Secure Electronic Transaction), that required the digital certification of merchants and consumers. The SET-based Wallet fared somewhat better in Europe and Asia, according to IBM. However, the vast majority of the market went for the ease-of-use of the SSL (Secure Socket Layer) standard developed by Netscape.

IBM has chosen to make its software for the client, and not for the server because users feel more in control of the personal information when the software is on their own PCs, according to Ralph Hertlein, product manager at IBM.

Also, this makes the consumer less tied to a special browser and less vulnerable to servers that might be down, he added.

But so far many consumers have been reluctant to download a client wallet that takes up several megabytes, said Giga's Bartels.

The IBM Consumer Wallet 2.1, which is available in 24 languages, costs a merchant a flat fee starting from $50,000 and increasing "depending on the relationship with the customer," said Hertlein. There will be no fee per click, he added.

Dorte Toft is a U.S. correspondent for the IDG News Service in Boston.

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