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By Kate Hanaghan, 10 July 2002 11:40

NEWS Microsoft has signed a deal with online payment firm Arcot to allow its controversial Passport technology to authenticate online credit card transactions. Passport will be integrated into Arcot's technology, which is behind the 'Verified by Visa' programme. Users making purchases at websites that are signed-up to Passport will be able to enter their Passport user name and password to authenticate their identity. Industry analysts believe the deal with Arcot is a good move for Microsoft, given its less than glowing reputation for security. Michelle Delussanet, analyst for Forrester Research, said: "It's a very wise move which adds credibility to Microsoft's security initiative." However, she added that consumers were "going to need a push" to sign-up to Passport just for the added authentication layer. Jose Lopez, security analyst for Frost and Sullivan, agreed that the Redmond giant is on to a winner with the Arcot partnership. He said: "This is good news for the Passport product and a sign Microsoft is looking to add credibility to its security strategy. They need this type of announcement to improve their reputation for security, which isn't very good." Concerns that consumers will be slow to take-up the service were echoed by Tim Jennings, research director at Butler Group. He predicted the service will appeal more to existing users. And while the move might "promote the perception that Microsoft 's Passport is getting into a dominant position", he added that "it is only a bite-size step forward that won't shut the Liberty Alliance out of the market". Microsoft was not available to comment on this story.