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Microsoft will incorporate VeriFone's transaction software into its Merchant System retailing software for building Internet storefronts.

Microsoft said today that it will incorporate VeriFone's transaction software into its Merchant System retailing software for building Internet storefronts.

Microsoft sent its software to about 175 beta testers today.

Verifone's virtual point-of-sale (vPOS) software, which will be built into Merchant System, lets online businesses securely handle credit card transactions. Verifone also markets vGATE, software for banks and credit card payment processors.

Both products support the Secure Electronic Transaction (SET) specifications, created by MasterCardand Visa International with various technology partners, for Internet commerce.

The Merchant System product is based on software Microsoft acquired June 11 through the purchase of eShop. Microsoft has now adapted the original Unix software for its Windows NT operating system and Internet Information Server Web server software.

"We want to minimize the custom development that retailers or anyone on the Web has to do," said Gytis Barzdukas, Microsoft product manager.

Merchant System will work with any Web browser or retailer's database software. Microsoft now plans to publish application programming interfaces (APIs) so vendors of tax software, shipping and handling technology, fulfillment systems, and payment systems, like Verifone, can write software to work with Merchant System.

Retailers can use Microsoft Internet tools, such as the Front Page HTML editor, or tools from other vendors to build their Web sites. Two sample storefronts are included in the beta version, with additional ones planned for the final release.

Microsoft intends to release client software for Internet shoppers to buy items on the Internet and is developing security tools as well. Verifone has its own client software.

Microsoft's merchant software will compete with high-end offerings from Open Market and Connect.

Related stories:
Credit cards strengthen security
MS adds eShop to its buying spree
VeriFone secures Web commerce
RSA delivers SET encryption engine
Netscape provides secure Net payments