Computerworld op/ed: E-wallets aren’t right for e-shopping

(This article was written in January 1999 and ran as an op/ed on Computerworld.)

If you are trying to enable e-commerce on your Web site, one thing you should steer clear of is e-wallets. Despite numerous and varied technologies, none of them work very well. Most just waste your customers’ time and will cause them to send their shopping dollars elsewhere faster than you can say “world wide wait.”

In theory, e-wallets are a good idea. They store shoppers’ credit-card and other identifying information electronically, so they don’t have to fill out the various payment forms. With a single keystroke, the e-wallets fill out these forms correctly and saves your customers lots of typing to order your stuff.

Unfortunately, theory and practice differ; e-wallets just don’t work. Everyone I’ve 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 the local malls.

Some e-wallets, such as those from start-up Launchpad Technologies Inc. (known as Ewallet), Microsoft (an e-wallet is included with Windows 98) and Citicorp’s Citibank take the form of software that must be installed on buyers’ PCs. This is a problem if your customers upgrade or switch their browsers or use more than one PC to do their shopping. Others, such as those from DigiCash Inc. (which recently filed for Chapter 11 reorganization) and CyberCash Inc., actually encode monetary value on your hard disk. To use these, you have to first exchange your hard-earned money for the Internet bongo bucks that are the scrip of choice for each wallet. This has the unfortunate side effect of losing all your dough if  your disk crashes. Some of these wallets only work on particular browser versions: Citibank’s doesn’t support Microsoft Internet Explorer, for example.

Imagine how hard life with physical wallets would be if they acted like e-wallets. You would have to carry several different kinds of wallets around with you, since each store would accept different payment systems. You couldn’t convert your dollars from one system to another without a great deal of work. And if you lost your wallet, you would be out of luck. I daresay consumerism would take it on the chin.

Here’s my advice. If you have a Web storefront, steer clear of e-wallets for now. Let your customers pay you as easily and as quickly as possible. Use credit cards and faxed purchase orders too. If you need inspiration, take a look at what Amazon.com does with its one-click ordering method: It stores customers’ account information on its site, and sends customers a cookie to keep track of who they are. It isn’t perfect, but it is painless. After all, the easier your site is for customers to buy stuff, the more stuff they will buy.

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