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Are wallets going extinct?

July 31, 2013

Your wallet probably carries all the most important financial cards and documents you have. But, according to a panel of e-commerce executives speaking at MobileBeat 2013, there are only a few impediments standing between us and a world where wallets have been rendered completely irrelevant by smartphones.

Your wallet probably carries all the most important financial cards and documents you have. But, according to a panel of e-commerce executives speaking at MobileBeat 2013, there are only a few impediments standing between us and a world where wallets have been rendered completely irrelevant by smartphones.

According to a report from VentureBeat, Paypal’s chief technology officer James Barrese claimed that his company was moving toward becoming a “digital wallet.” Arguing that successful mobile payment strategies derive from customers having positive feelings about online merchant accounts, he feels that the ultimate focus should be on improving online credit card processing to a point where consumers feel it’s more convenient. The panel cited the fact that “drop-off” rates of consumers who don’t purchase an item in their online cart due to a disinterest in entering their credit card information can be as high as 75 percent.

Statements from the other executives mirrored Barrese’s aims. Part of that drop-off is attributed to security fears, among other things – and the key to maximized online profits is helping consumers to overcome these fears. But Ari Mir, CEO of PocketChange, claimed that a cultural shift is quickly turning society-wide adoption of online shopping into a reality – if businesses can offer top-level credit card mobile processing.

“Consumers are more comfortable with publishing their digital identity publicly,” he said. “At this point, a majority of consumers have purchased something online with a credit card, and people spend a tremendous amount of time on their phones. Understanding that mobile is synonymous with convenience is what it will take to win.”

Back-to-school shoppers already using their smartphones in large numbers
According to a recent survey from Deloitte, the time of full smartphone-shopping permutation may have already arrived. The firm found that 78 percent of polled smartphone users plan to use their devices to assist in their back-to-school shopping.

“Online and mobile channels are the season-winning plays for retailers this year,” said Allison Paul, vice chairman of the firm.

She argued that while customers optimize their smartphones for shopping options and using them on a more regular basis for purchases, retailers need to optimize their e-commerce options to offer the best online experience possible.

“If retailers get in front of the consumer who is checking prices, product details or product reviews, they become part of the experience rather than disappearing into the clutter … We expect to see strategic retailers do more than offer promotions through digital channels,” she said.

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