ust two years after they were heralded as "here to stay," electronic wallets appear to be on their way out. The latest setback to the e-wallet movement came when American Express unexpectedly announced that its Online Wallet no longer would be available as of June 15. While other large providers - such as Visa, MasterCard and Discover - continue to try to push the concept, the reality is that it doesn't appear to be catching on.

The last holiday shopping season, when the promise of e-wallets became overshadowed by talk of slipshod customer service and uncompleted shipments, showed that millions of customers were just as at ease with typing their credit card information into online forms, which eliminated the perceived need for special payment methods.

David Strom of Computerworld magazine says that every one that he has tried has failed on the first attempt at buying something. "That isn't a good track record. In fact, it's one that can send shoppers back to their cars and local malls," he said.

A recent study of the top 10 online retail sites by Creative Good confirmed Strom's experience: It found that 39 percent of attempted online transactions fail. E-wallets were supposed to cure the problem, but customers frequently abandoned the process before finalizing a purchase.

American Banker recently reported, "Theoretically, electronic wallets spare users the hassle of retyping personal information at each Web site they visit. But the people have appeared indifferent to this advantage."

Carl Steffanelli, MasterCard vice president of electronic commerce and emerging technologies, said consumers abandoned e-wallet because it took too long to complete the purchase, merchants wanted too much personal information and there were too many fields to fill out.

Scott Brinker, chief technology officer of I-on Interactive Inc., said consumers are not utilizing e-wallets for two reasons: "One, I am told is that it just seems like too much of a hassle to find an e-wallet and get it all set up. The second excuse is, I shop at a lot of different places; why should I use an e-wallet if half the places where I shop aren't going to support it?"

"There's been no screaming need for it," said Therese Wells, director of marketing for Seattle-based Qpass, one of the first e-wallet providers. "While a wallet is a very cool technology and it fills a need, it doesn't fill a very compelling consumer need that they have." And there's this from Stacey Pinkerd, vice president of consumer products at e-Visa: "Most consumers still actually only buy from a few sites, and those few places already have their data. The wallet providers are looking for consumers to invoke the wallet, and the consumer doesn't because they don't need it."

Such talk would have been considered silly in 1999, when a New York Times Magazine hyped the emergence of e-wallets with a story titled "Is Cash Dying?"

Patricia Seybold told readers of her Business 2.0 column, "Digital wallets are here to stay, and demand your support."

And Tim Clark of CNET News.com reported, "Merchants are jumping onto the e-wallet bandwagon because they see a significant percentage of their shoppers abandoning online purchases part way through the process because checkout procedures are too complex or arduous."

Indeed, it seemed as if everyone was getting on board. In October 1999, software giant Microsoft Corporation unveiled "Passport," its version of the electronic wallet, which enables consumers to store encrypted billing and shipping information at Passport-enabled merchant sites. Initially, more than 50 e-tailers signed up for the service.

Later that year, Providian Financial Corp. launched its digital wallet, Aria Personal Shopper, through its Aria Visa Web site. Then, just in time for the holidays, Visa U.S.A.'s Internet arm joined the group, along with Providian of San Francisco, Bank One Corp., Capital One, MBNA and U.S. Bank, by introducing its pilot digital wallet program.

MBNA, the largest independent credit card issuer in the world, and Brodia, a major provider of online wallet technology, launched their digital wallet program. The Brodia wallet simplifies online shopping by allowing customers to securely store multiple credit cards, shipping and billing addresses, then automatically fills out order forms at the checkout of hundreds of the most popular online stores. That same month, Wells Fargo & Co. launched its "better mousetrap," the EasyOrder online shopping service.

Finally, MasterCard introduced its e-wallet solution, which enables cardholders to enter and store their credit card account number and their shipping and billing addresses.

In May, Brodia's smart wallet was unveiled at the CardTech/SecurTech convention in Las Vegas. It authenticates online payments, remembers passwords and fills in forms with a single click. Also in Las Vegas, WearLogic introduced its Smartwear Wallet, the industry's first leather electronic wallet.

According to the Nilson Report, U.S. financial institutions are expected to issue approximately 35 million smart cards within the next three years. An ActivMedia Research study indicated that smart card and e-wallet transaction volumes will grow from $500 million in 2000 to $5.7 billion in 2001 and $20 billion in 2002.

So why would American Express pull out? American Express Blue Card customers are considered the most technologically literate users around, and they frequent the Internet more than any other group. The fact that they did not find a requirement for the e-wallet application is a condemning indictment of the product and its concept.

"We initially thought the form-fill would offer convenience, but we found out with the number of changes merchants make to order forms and changes over the Internet that there was not nearly the convenience we once envisioned," said Tony Mitchell, an American Express spokesman. "We think it is more of an issue of people wanting a secure way to shop online."