Internet users should be, at least passively, familiar with digital wallets. What with big players like Yahoo and AOL touting branded versions within their e-commerce spaces. But a survey by BizRate.com found use of digital wallets is lagging.
A digital wallet is encryption software that works much like a physical wallet during an online commerce transaction. The application was created to provide Internet users a convenient way to instantly access stored personal information, such as credit card numbers, site login names and passwords, and shipping information.
In a survey of 14,000 online buyers BizRate found that 38 percent were familiar with the digital wallet and its abilities to secure payment and shipping information for online orders — a 3 percent increase in awareness compared to the same survey conducted last year. Another quarter of surveyed online shoppers had heard of the term but were not aware of the use for digital wallets, while the remaining 37 percent of respondents were “completely unfamiliar” with the product.
“Overall awareness of digital wallets is high, with nearly two of out of three shoppers surveyed by BizRate.com familiar with the application,” said Seth Geiger, VP of Professional Services at BizRate.com. “But usage will lag behind awareness until the benefits outweigh the learning curve.”
Indeed, ease-of-use may be the most important factor in determining if a new online payment method gains acceptance. For example, early trials of micropayment technology (online purchases that are measured in pennies or a few dollars) required users to download digital-wallet software onto their PCs.
“The consumer has shown indifference to downloading a wallet, ” said Bruce Wilson, chairman of the Electronic Funds Transfer Association. “What we have found is that all of the heavy-wallet approaches don’t work.”
Of the BizRate respondents who said they were familiar with digital wallets, only 22 percent had actually used one for an online transaction, and only 5 percent of those claimed “frequent” usage.
Evolving technologies are expected to pick up those numbers, however. Software giant Microsoft is touting its Passport software, which includes universal sign-in, registration and a digital wallet, and companies like Amazon.com are heading the call for simplicity with their own one-click shopping capability.
In the meantime, it’s the big online shoppers that appear to be fueling today’s digital wallet.
“Based on our survey, those shoppers who use digital wallets frequently spend on average nearly $200 a month online,” said Geiger. “Clearly, these are active online consumers who are taking advantage of a key benefit of shopping on the Web.”
Reprinted from siliconvalley.internet.com.