Why Does Bill Gates Want Your ID, Credit Card Data?

WITH as much money as Bill Gate already has, you'd think he'd be above pickpocketing.

Yet his company's latest invention, the Microsoft Wallet, is designed to lift your identification, credit card numbers and other valuables right out of your pocket and store them on one of the company's servers.

Unlike real pickpockets, Microsoft isn't trying to do this behind anyone's back. Still, the company seems in this case to be pursuing the same goal as any common crook: To get rich without doing anything productive.

The Wallet, part of a universal log-in service called Passport (www.passport.com), is billed as a way to streamline e-commerce transactions. If you store your credit card numbers, shipping address and identifying information with the service, it will automatically provide that data to participating online stores whenever you want to make a purchase.

The idea is that shopping with Microsoft's Wallet will be more convenient than using your own. Instead of typing in your data for each purchase, you can click on the Wallet logo, select which credit card you'd like to use and leave the rest to the software.

It's sort of like cruising the mall with a personal assistant who deals with the sales clerk when you've found something to buy. In this case, though, the assistant keeps your credit cards when you're done.

If that doesn't sound safe, you're probably right. Microsoft will be storing thousands, perhaps millions of credit card numbers on a computer that any hacker worth his Nine-Inch Nails T-shirts would love to peek into.

The company's Web site promises the data is stored in a "secure database" and that credit card numbers are encrypted. Still, don't you think that information would be safer if it weren't online at all?

Remember, Microsoft is the company that inadvertently allowed any knucklehead with a Web browser to read private messages sent to users of its free Hotmail service. Before that bug was revealed in late August -- and repaired a few days later -- Hotmail users might well have believed Microsoft's promises about securing their data.

Even if your Microsoft Wallet is never stolen, you still might have trouble using it. It only works at sites that agree to accept it, and that list so far includes fewer than 100 of the Web's countless e-commerce shops.

Why so few? Perhaps because most online businesses don't see any good reason to give Microsoft a portion of their profits. To get on the list, sites must agree to pay the software giant a flat annual fee, anywhere from a few hundred bucks for small sites to hundreds of thousands of dollars for larger sites.

Also, customers who choose to pay with their Wallet will be passed through two Microsoft Web pages to complete the transaction. The company plans to sell ads on one of those pages in hopes of sucking a few pennies of profit out of every transaction.

So while the Wallet seems free, it actually makes users pay two different ways: with whatever attention they pay to the ads and, more tangibly, with the higher prices e-commerce shops will have to charge to cover the cost of paying off Microsoft.

Indeed, even online shoppers who shun the Wallet could end up paying for the service indirectly through higher prices.

You can't blame Microsoft for trying to horn in on e-commerce. If Net users actually embrace the Wallet, the company would be in a position to lord over online sales like a Mafia kingpin, strong-arming sites into refusing other forms of payment. You can be sure someone at Microsoft envisions a day when every dollar spent online will pass through Microsoft's balance sheet.

Of course, Microsoft officials discuss the Wallet's potential in slightly less ominous terms. "We have a tremendous opportunity to grow e-commerce at large," product manager Margie Miller said. "We're trying to lower barriers to e-commerce for both consumers and businesses."

In fact, the Wallet raises a giant barrier -- Microsoft itself -- between e-commerce companies and their customers. The Web's retailers should be working to develop their own relationships with online shoppers rather than paying Microsoft to introduce them.

Many online stores already make things more convenient by retrieving billing and shipping data from a "cookie" stored safely on their returning customers' own computers. Amazon.com has gone so far as to patent its own "One Click" shopping method, though similar processes have been used by other sites.

Even without such niceties, though, I don't think too many online shoppers mind typing in their billing information when they make a purchase. And I'm sure they feel safer knowing their wallet is where it belongs: in their pocket.

To contact syndicated columnist Joe Salkowski, you can e-mail him at [e-mail] or write to him c/o Tribune Media Services Inc., 435 N. Michigan Ave., Suite 1400, Chicago, IL 60611.