Digital wallets attempt to save time, headaches

By Mark Anstead
Special to CNN Interactive

February 28, 2000
Web posted at: 4:40 p.m. EST (2140 GMT)

(CNN) -- A handful of digital wallet services launched on the Internet last year are now frantically competing to simplify online shopping. Digital wallets store personal data free of charge, automatically fill forms, log users into registration sites without the need to recall passwords and aggregate internet accounts for viewing in just one place.

According to Forrester Research, 66% of online shoppers abandon their shopping carts at the checkout because of repeatedly having to fill in forms with credit card numbers and address details. Digital Wallets, including Microsoft's Passport and Novell's DigitalMe, hope to attract millions of would-be Internet shoppers with a simpler way of ordering online. Users are able to enter their personal information in one central repository and carry that identity with them from site to site. Then, when it comes to making a credit card purchase, it can all be done with just a few clicks of the mouse.

But some of the new 'infomediary' services are having trouble delivering a reliable service. In many cases the wallets don't work with a wide enough range of sites, leaving consumers doubting their real value. And privacy advocates are concerned about the business model they operate. Since the services are offered for free, revenues can only come from advertising targeted against personal data.

"Advertisers are already watching where people go on sites and now they're trying to get details of what is actually bought," says Jason Catlett of Junkbusters, an Internet Watch organization. "Companies holding personal profiles should be required by law to handle the information with extreme care and only use it for the primary authorized purpose."

Digital wallet services claim they don't pass on personal data without user consent. But they do allow their database of users to be targeted 'anonymously' according to advertiser's criteria. In real terms that means if an advertiser wants to reach women between the age of 40-50 who live in Dallas, the wallet service can select those users from within its database, even though it never hands over a name and address.

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"It's really designed to take the ability to stay anonymous away from consumers," says David Banisar of Privacy International. "Businesses in this space are renowned for changing data protection policy when it suits them. Who can guarantee they are not adding the names and info you provide to the ad networks that make their money by spying on you?"

From a practical perspective the wallets have a long way to go before they become truly popular. The automated form filling can be very hit-and-miss at sites the services don't recognize. And the password management tools only work with a fixed list of predetermined Web sites in many cases. Dow Jones Interactive, for example, hosts a searchable archive of the world's top 6000 news publications and is precisely the kind of site where an automatic login would be useful. But DigitalMe and Ezlogin both failed to gain access to this site while Microsoft Passport only works within the Microsoft Network.

The one automatic login service successfully accessing Dow Jones Interactive has a very unconventional login method. Passcenter.com assigns its users five 'passfaces', which have to be recognized as they appear in randomly generated positions within a grid. These faces are easier to remember than traditional passwords. But it is uncertain whether such a method could ever become commonplace - its very difference may make it seem too strange to catch on.

Passcenter is at least completely free of advertising. Their business model relies on licensing the Passfaces technology for corporate use.

"We want to simplify life on the Web and we certainly have no intention of subjecting users to unnecessary advertising or exploiting personal data," says Paul Barrett, CEO of Passcenter.

When it comes to popular e-commerce sites such as Amazon or CDNow the digital wallets manage to offer automatic login without any problems. The limitations only come into view when a user attempts to set up a wallet to work with a site not already included in top 100. Depending on the design of the system this is either a simple process but one not guaranteed to work, or a complicated one that may not be worth the effort involved.

Some of the wallets operate via a downloadable plug-in browser bar. The bar intrudes into available desktop viewing space inside the browser and needs re-loading every time the user opens a new window, slowing surfing considerably. There is a clear demarcation between services such as Ecode and Obongo whose designers clearly felt the bar was a justified evil considering the gain in functionality, and services such as Passcenter.com and Ezlogin, who did not. Bars tie users to one machine -- the machine it has been downloaded into. Given the clear market for these products among busy mobile professionals, bars are arguably a less clever way to design digital wallets.

Passcenter.com, Ezlogin and Yodlee.com operate along more portable, browser-only, lines. But Ezlogin's navigation is counter-intuitive and the huge amount of dynamically generated content each page attempts to call slows the service down considerably. Yodlee aggregates the user's account information into one place, providing that the user has accounts with the fixed list of sites included in Yodlee. Otherwise, you have to go through the tedious process of suggesting a site for inclusion before being granted access to it.

Perhaps digital wallets are an idea whose time is yet to come. Meanwhile, most of these services will continue to be used mainly by users in search of autologin features and password management. If you've lost track of your passwords, they're a godsend.

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Passcenter
Microsoft Passport
EZlogin
Novell DigitalMe
eCode.com
obongo
Yodlee

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