When and how should merchants take advantage of the technology?

Merchants enjoy unique power during the emerging period of the Digital Wallet. Lack of standardization will make it possible for leading commerce sites and their mid-tier competitors to pursue narrow exclusionary one-click strategies.

According to Jupiter Communications, within a few years standardized wallets will begin to take hold, causing Digital Wallet networks to grow rapidly behind merchants, portals, and third-party providers causing nonparticipation to prove counterproductive.

Most merchants, with or without their own one-click capability, should pursue an expansive wallet strategy, using their present leverage to strike advantageous, nonexclusive deals with multiple wallet partners. Essential factors that merchants must consider before partnering include the payment scheme (if any) and the data-sharing arrangements. Merchants should resist actively tweaking their site to hamper the compatibility of a form-filling wallet. Larger merchants and portals should add functionality and features such as allowances and receipt tracking to their one-click systems. With few exceptions, even large merchants remain open to multi-site wallets.

Among wallet technologies, merchants, particularly those without their own one-click capability, should strongly consider server-based systems that support incremental, scaling arrangements that require no substantial technology or financial investment. CyberCash's one-click system, for instance, requires a relatively small set-up investment for a mid-tier merchant site, after which payment is per-transaction. Likewise, Transactor Networks will become a valuable partner once current distribution deals with banks and portals garner a significant active base (though its form-filling capability is not a replacement for true one-click purchases).

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