Microsoft flashes a new wallet

The move to a new service under the company's MSN portal will allow Passport to focus on its "core mission" of authentication services, Microsoft said.

Passport was supposed to be a central aspect of Microsoft's consumer Web services plan, called .Net My Services. But that project has caused confusion over just how the technology will work, while raising hackles over consumer privacy. Creating a new system to store payment and shipping information could address some of .Net My Services' privacy concerns.

"We've done a bunch of work with partners and consumers, and it's clear that they want (Passport) to be an authentication service," said Rob Bernard, product unit manager with MSN Shopping. "The aggregation of the wallet and authentication service was not attractive to them."

The Passport wallet will continue to work until March so that customers and retailers won't have to make changes over the holiday shopping season, the company said.

Data won't be transferred between the old and new services, however, meaning customers will have to re-register for the new service. Customers will need a Passport account to access the MSN wallet service.

People can start signing up for e-wallets Tuesday. Microsoft expects the first retailers to go live with the service in the next few weeks. Microsoft said it has signed up a number of retailers including Kmart, The Sports Authority, FogDog Sports, OfficeMax, RitzCamera.com, Blue Nile and Nordstrom.

Efforts to launch e-wallet services have been met with mixed success. Both AOL and Yahoo offer online wallets. Amazon.com's "one-click" service, which stores billing and shipping information on Amazon and some of its partners' sites, has the potential to be used as an e-wallet.

While e-wallets can save consumers time, many are uncomfortable giving up control of personal information. What's more, few seem to want to take advantage of such a service. A recent Gartner study found that only 3 percent of those surveyed listed the convenience of entering credit card information once as a feature they were looking for from service providers.

"(Earlier attempts) haven't succeeded because they haven?t really provided huge ongoing benefits to consumers," said David Danford, a product unit manager with MSN wallet.

Danford said the new service will be somewhat more streamlined than the Passport wallet, eliminating the need for consumers to sign in multiple times when visiting retail partners. It will eventually offer consumers access to other benefits such as coupons or special promotions, as well as allow them to track purchases.