Discover Financial Services Inc. plans to introduce an online shopping product today that combines a single-use-account-number feature and a digital wallet that automatically fills in forms at merchant Web sites.

Discover, a subsidiary of Morgan Stanley Dean Witter & Co., developed the new product, called deskshop 2.0, in conjunction with Brodia, the digital wallet software company in San Francisco, and Orbiscom Inc., the disposable credit card number software vendor in New York. Deskshop combines features and functions of a digital wallet with the ability to give merchants so-called disposable credit card numbers, which are valid for one purchase only and differ from a cardholder’s real account number, the first such combination.

Two other major card issuers, American Express Co. and MBNA Corp., have introduced one-time-use number schemes recently. American Express offers a program called Private Payments and has promised to offer its cardholders the ability to mask their identities when Net surfing. MBNA America Bank offers Orbiscom’s disposable credit card numbers in a stand-alone product called ShopSafe, started in October.

One-time-use credit card numbers, which are designed to prevent hackers from fraudulently using account numbers stolen from a merchant’s Web site, “may be one of several killer applications,” said Roger Hochschild, executive vice president for business development at Discover. “We are the first to put them together” with a wallet.

If Discover’s online credit card system has gauged consumer desires correctly, it could boost its participation in an online spending binge. “We focused on making sure it was usable and easy to use,” said Mr. Hochschild. “It has to be simple.”

Discover card customers are to be able to download deskshop 2.0 from Discover’s Web site and use it by clicking on an icon on their desktops, or whenever it pops up in response to the appearance of a merchant’s order form. Some people who sign up for the Discover card will get two products in the mail: the usual magnetic-stripe card for offline purchases and a card-size CD-ROM, called a card-rom, that will hold deskshop 2.0 software. The CD-ROMs are meant to encourage new cardholders to try the software and visit Discover’s Web site.

Discover will promote deskshop 2.0 in newspaper advertising, Internet banner ads, and possibly in television ads during the holidays. People who sign up for deskshop 2.0 can also get a free personal e-mail address to give to online merchants.

“A lot of people are reluctant to give out their main e-mail, given what that might be used for,” Mr. Hochschild said. He said company research found that people were more concerned about giving out e-mail addresses than about remaining anonymous when at merchant sites. “They want their information private, but they don’t want anonymity,” he said.

In software circles, a number after a product name signifies a new, improved version of an older product. Discover says deskshop 2.0 was developed from its original online credit card, launched in January, and reflects extensive customer research and custom software development.

“Deskshop 1.0 was a great opportunity to get feedback,” said Colleen Zambole, Discover’s vice president of e-commerce. Among the improvements suggested by customers was that the online credit card automatically pop up when the customer reaches a purchase page. The new software keeps track of online purchases and the cardholder’s available balance, and it can also store passwords for Web sites — even those that are not merchant sites.

An industry analyst calls Discover’s new product a particularly imaginative response to well-documented consumer worries about online security.

“They thought outside the box in combining” the form-fill with the disposable credit card numbers, said Theodore Iacobuzio, a senior analyst at TowerGroup, a research firm in Needham, Mass. “It will perform lots of functions that chronic Internet shoppers find useful.”

The online credit card’s combination of features required an extensive custom programming effort, led by Brodia. Marc Metcalf, Brodia’s president, said its digital wallet product has been greatly improved from last year because of comments and participation from card-issuing companies.

“We were a little bit ahead of ourselves in developing a product that, in terms of core function, wasn’t as good as it should have been,” he said. “The core wallet technology will continue to be useful, and different applications will get added in. We are allowing our partners to determine how they want to drive their service.”

To cement its advantage, Morgan Stanley invested in Brodia, becoming one of several participants in a $30 million round of funding that closed this month. Neither company would say how much Morgan Stanley invested.

Using the slogan, “You can’t steal what’s not there,” Discover is to begin a national advertising campaign for the product, deskshop 2.0. The company hopes to reach holiday Internet shoppers.

Discover’s deskshop 2.0 launching came in time to help it capture a share of what is predicted to be a strong credit card shopping season. The payment tracking firm of Frederick, Md., has estimated that $15 billion will be charged online to all major credit cards between Thanksgiving and Christmas. Jupiter Research, a Jupiter Media Metrix company, reported that 1999 Internet holiday spending totaled $7 billion, and it has predicted that this season’s spending will reach $11.6 billion.

MasterCard International and Brodia, which sells software for digital wallets and other applications, have expanded their relationship to include the development and marketing of an e-business platform, the companies announced Monday.

MasterCard’s relationship with Brodia began in July with the introduction of a MasterCard eWallet — provided by Brodia — and a national advertising campaign aimed at raising consumer awareness of the benefits of digital wallets for online shopping. The two companies also have identified opportunities to broaden their portfolio of e-business services to cardholders, planning such services as expanded e-wallet capabilities, consumer-to-consumer payment support, mobile commerce capability, smart cards, and other personal commerce services.

Under the new agreement, Brodia will work with MasterCard to market the Brodia-based platform to members throughout the world as a comprehensive solution built to enhance payment card functionality. MasterCard members will be offered preferential pricing.

Built upon Brodia’s core Identity Management System, the platform will let MasterCard members offer their cardholders secure storage and access to their personal information and preferences for use in executing any type of transaction. The companies said this platform — elements of which are already being used by several leading banks — will help people manage their personal commerce on the Internet with an integrated suite of applications that dramatically simplifies purchasing and payments through the Web.

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