The Digital Wallet concept began in 1996 with wallets that required simultaneous adoption by merchants and consumers. In theory, consumers would have the opportunity to purchase merchandise and information via credit card or anonymous digital cash.

Wallets required the consumer to download and install software. This procedure was difficult and time consuming. Most web stores did not accept digital wallets, only allowing consumers to key in credit card numbers and transmit them across a secure connection. This first round of wallets failed due to their difficulty of use; quickly the critics presumed the digital wallet idea dead.

The second coming of Digital Wallets beginning in 1998 did not create an onslaught of use. IBM, Cybercash, Microsoft, and Trintech all announced wallets that worked with SET or without. Security was the key differentiation of this breed of wallets, instead of a complicated proposition for anonymous bit-based cash.

Until recently, digital wallets failed due to painstaking download times. Retailers could not convince users to engage in the process of installing and configuring the wallets. The wallets also had no marketing muscle behind them. Now Digital Wallets, such as Microsoft’s Passport and CyberCash have server based portable system and appear to getting ready for mainstream.



1996 - Client-side, downloadable Digital Wallets enter the market

1998 - Wallets differentiated by security

1999 - Server-side wallets push for larger consumer leverage

2000 and beyond….

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