The Electronic Catalog: Are E-Wallets Empty Wallets?

For the past few years, technology pundits have touted electronic wallets, or e-wallets, as part of the e-commerce future. Multisite e-wallets were supposed to be convenient, allowing customers to store all their credit-card information in one location for use at multiple Websites.

But according to a GartnerGroup survey of online shoppers last year, only 1.3% used a multisite e-wallet. “Even if that percentage were to double in a year, it’s still a very small percentage of people who use the technology,” says Ken Kerr, an analyst with the Stamford, CT-based research firm. What’s more, he says, “most people don’t transact online often enough to make the inconvenience of entering in credit-card data that onerous.”

In fact, many consumers shop repeatedly from only a handful of Websites, Kerr says. Those sites likely already have the credit-card and shipping information on file for the customer. “Unless customers are flipping from one credit card to another, they might not need an e-wallet,” he says.

Multisite e-wallets are downloaded by consumers from the Website of a financial institution, such as a bank, that has a relationship with an e-wallet vendor. They are then stored on either the bank’s server or the consumer’s desktop. To use the wallet, the customer needs to launch an applet from his desktop. The wallet will work with any of the more than 200 top online merchants for whom the e-wallet vendors have configured their technology. And last year a standard protocol called electronic commerce modeling language (ECML) was introduced with the backing of such heavy hitters as Sun, Microsoft, and IBM. ECML would allow all multisite e-wallets to talk to any number of e-commerce sites.

Site-based e-wallets, however, are the most common type of e-wallet. Behemoth books and gifts Internet retailer Amazon.com was one of the pioneers of the site-based e-wallet, which allows customers to securely store all their credit-card and shipping information on the merchant’s Website. While there are no statistics for how many consumers have such accounts with online catalogers, many Websites offer the feature under the name “My Account” or a similar moniker.

If the multisite e-wallet concept is to take off, it will likely be by way of mobile commerce. “If people use cell phones or other wireless devices to make purchases, then a multisite wallet may become useful, since the keypads of such wireless devices make it difficult to enter information,” Kerr says.

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