This article is part of a VB Lab Insights series paid for by Capital One.
Who doesn’t love one-click purchasing? Today, we no longer need to fumble around for our wallet or check our phone for where our credit card number is saved at the online check-out page. We don’t need to parse our delivery address from our billing address. Gone are the days of friction-laden online shopping.
Digital wallets and similar payment technologies have just about eliminated the need for deep stacks of cards and bills stuffed into pockets and purses. Indeed, they have taken the world by storm: digital wallet payment volume is expected to grow by nearly 40% by 2024, at which point it will account for about 41% of all e-commerce payments.
But when it’s easier to spend, we tend to spend more. And that’s not always a good thing when we’re unsure of where our money is going. The University of Illinois Urbana-Champaign found that when consumers first started to use mobile wallets, we completed 23.5% more transactions, most of which were on low-cost items; as a result, our overall spending jumped by 2.4%.
So, while digital wallets eliminate friction and enable more spending, it has come at a cost: uncertainty, confusion and a lack of confidence that we really know what we’re spending our money on. Have you counted how many streaming services and auto-refill products you’re now paying for? The advent of one-click spending has created its own set of challenges. Caring for the whole customer’s wellbeing will be the next frontier for brands looking to create …