Electronic Commerce: Provider of Internet Wallets Signs Up 3 Big Card

QPass Inc., a two-year-old Internet transaction company, has extended the electronic wallet concept by signing three financial institutions to use its software.

Royal Bank of Canada, MBNA Corp., and Providian Financial Corp. have all agreed to test QPass' PowerWallet. Together, the institutions have 30 million credit card holders who are potential electronic wallet users.

"Our goal is to have 100 million cardholders by the end of the summer" through alliances with additional card issuers, said Cornelius Willis, vice president of marketing at Seattle-based QPass.

On the merchant side, QPass has signed up 12 companies. These include The Wall Street Journal, which delivers articles digitally over the network; Morningstar, which offers data from its mutual fund data base; and Corbis, the digital image library.

Royal Bank plans to kick off its branded version of PowerWallet in October because "we want a meaningful number of people in the market in time for the Christmas season," said vice president Allan McGale.

Last year Christmas shoppers spent $3 billion to $4 billion on-line, according to Boston Consulting Group. The total is expected to jump to $9 billion to $10 billion this year.

Royal Bank will pilot-test the wallet with "several hundred thousand" cardholders, eventually offering it to all of its five million card users, Mr. McGale said. The bank is also a major merchant processor, with a 25% market share in Canada. Eventually Royal Bank's U.S. Internet subsidiary, Security First Network Bank, may offer the wallet to its banking customers.

PowerWallet would be free.

"We are at the stage where we're learning about wallets and consumer behavior," Mr. McGale said. "We want to make sure the issues that are important to consumers are covered."

One reason Royal chose PowerWallet is its sophisticated form-filling capabilities.

Industry analysts estimated that about one-third to two-thirds of all Internet purchases are abandoned before checkout, mainly because of the tedium of filling out on-screen payment forms.

PowerWallet users can shop anywhere on the Web after entering their credit card and billing information just once.

QPass Inc. worked with eHNC, the Internet division of San Diego-based HNC Software Inc., a provider of neural network technology, to build the intelligent form-filling capability.

"PowerWallet learns new forms as the Internet continues to change," Mr. McGale said.

PowerWallet also captures receipts and shipping information, Mr. Willis said, and it keeps track of passwords. It supports Electronic Commerce Modeling Language, a recently introduced standard for wallets that is backed by MasterCard International, Visa U.S.A., American Express Co., and numerous technology and Internet-marketing companies.

San Francisco-based Providian has signed a letter of intent to use PowerWallet on its Aria.com Web site. Begun two months ago, Aria.com offers to make instant decisions on credit card applications. Eventually people who sign up for a card would be able to get a digital wallet at the same time.

Providian plans to start its pilot test in the third quarter. "We expect to go to full rollout this year," said James Rowe, senior vice president and head of electronic commerce at Providian.

MBNA is pilot testing QPass' PowerWallet. The monoline lender has also signed on to use wallets from two other vendors, Cybercash Inc. and Brodia, which was formerly Transactor Networks Inc.

"As our customers become increasingly active on the Internet, we want that experience to be as safe, secure, and easy as possible," said John Cochran, executive vice chairman of MBNA. "Electronic wallets allow us to achieve these objectives."

QPass and eHNC designed PowerWallet "to give banks the option to develop consumer affinity and promotional programs on-line," Mr. Willis said.

But one expert warned against putting too much emphasis on this aspect of electronic-commerce marketing.

"Banks see form-filling as equivalent to monthly statements stuffed with advertisements," said Vernon Keenan, Internet commerce analyst and founder of Keenan Vision Inc. in San Francisco. "But consumers will quickly see the commerciality of the initiatives and will not be enthralled."

Mr. Keenan was skeptical about the potential of wallets in general. Banks are "going overboard," he said. "It's a case of a big institution foisting new technology on consumers when they're not asking for it."

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