The digital wallet has been developed by Visa to help banks achieve implementation of the Three Domain SET Model - a new security programme which gives members until October 2001 to provide online authentication services to cardholders.

Visa plans to charge banks $50,000 to enroll for its electronic wallet, with an ongoing annual fee of $20,000.

“By providing a server based wallet service, Visa is ensuring that all of our members, from the smallest to the largest, will have access to an easy-to-implement, cost effective solution for providing authentication services to cardholders," says Jon Prideaux, executive vice president, Virtual Visa.

Germany's Bankgesellschaft Berlin will be the first to issue the Visa-backed system to cardholders. Hans-Juergen Torkler, managing director card service at the bank says Visa's 3-Domain model is the only certain way of providing top-level security to cardholders transacting online. "Using Visa’s services means that we can make this happen sooner rather than later, and also meet our own internal costing requirements," he says.

The Visa electronic wallet is designed for cardholder purchasing at Internet merchants. Rather than security software being stored on a cardholder’s PC, it is stored on a server, allowing a cardholder to use their wallet from any access device, such as a PC - and eventually mobile phone, PDA or digital television. The electronic wallet contains the card account information and a SET certificate for the card.

”All the studies show that the major reason most consumers are not shopping online is that they are scared to use their payment cards. Of course any solution must be easy to implement and use - the solution has to be practically invisible to the consumer. That is where we went wrong with the original end to end SET model. But under the new 3 domain model - today all a cardholder has to do is type in a password and they will have full SET protection each time they shop online," says Prideaux.