Wells Fargo will discontinue its digital wallet offering, EasyOrder, due to lack of consumer demand.
Wells Fargo developed its offering with assistance from Brodia, a vendor in the digital wallet business. In 1999, Wells Fargo ran a pilot version of EasyOrder and then officially offered it in June 2000. At that time, Wells’ focus was to direct more customers to its website by offering the digital wallet product. However, well under 1% of its customers use EasyOrder, therefore forcing Wells to re-evaluate the business logic behind the digital wallet.
Digital wallets essentially allow a customer to access all his or her personal information with one click of the mouse. Once customers input their information into the wallet, they should be able to shop online at multiple sites and simply use the digital wallet as their payment method. The digital wallet encrypts the information it sends to provide secure authentication and reduce fraudulent activities. But despite these features, digital wallet acceptance in the US is still low.
This should not come as a huge surprise to providers especially because US consumers are still wary regarding online payments. Datamonitor figures show that over 97% of consumers shopping online use credit or debit cards as their primary form of online payment. For those who choose to pay offline, a little over 26% cite Internet security as a motivating factor. This implies that many consumers are not aware of the safety and benefits offered by digital wallets, which is due to poor marketing and communications efforts by financial institutions.
Financial services institutions have not invested enough resources in marketing alternative payment methods. They must communicate the advantages of payment devices such as the digital wallet. For example few consumers are aware digital wallet providers offer monetary incentives, such as discounts, at many online retailers. If financial services institutions were to develop more active marketing campaigns describing the benefits offered by digital wallets, consumers would be more willing to accept it as an additional payment method.
