o extend its online ID authentication system to authorizing credit card payments, Microsoft Corp. has partnered with Arcot Systems Inc. to integrate its validation service, .NET Passport, with Arcot's TransFort payment authentication platform. Arcot TransFort provides secure acceptance and authorization of online payments. It is the first authentication system recognized by Visa and also supports the MasterCard Secure Payment Application (SPA).

.NET Passport provides a single sign-in and user interface for authentication on .NET-enabled Internet sites but had lacked the backing of a bank or credit card issuer.

Two of the primary solutions from card-issuing banks that support online credit card authentication are Verified by Visa and MasterCard SPA. Verified by Visa, for example, allows banks that issue Visa credit cards to validate online purchases. For consumers, these methods help eliminate the uncertainty of online transactions.

More than $700 million was lost to online fraud in 2001, representing 1.14 percent of $61.8 billion in online sales, according to Gartner, Inc. research. The rate of Internet transaction fraud is 12 times higher than in-store fraud. Recent research by Gartner indicates that U.S. consumers are adopting credit card company solutions to protect themselves against online fraud, and organizations involved in e-commerce are reacting to this.

"Arcot is the solution provider enabling the Verified by Visa Issuer Service for our member banks," said Jon Prideaux, Executive Vice President of Visa Europe (EU). "With the integration of Passport, the Arcot TransFort platform now offers increased functionality and choice for issuers and cardholders with another means of cardholder authentication for Verified by Visa."

As a customer of the .NET Passport authentication service and the Arcot TransFort solution, Doug Cavit, Chief Information Officer of McAfee.com, said, "We think the integration of Passport and TransFort will break down barriers for customers, making it easier to access and purchase McAfee products and services conveniently and securely."

Gartner believes more authentication systems will be adopted if the credit card companies backing these systems lower the fees they charge the merchants that support them.