As Square shuts down Wallet, pundits wonder - Are mobile wallets dead?


Square is ditching its Wallet app and replacing it with Order--a new mobile payments app that allows customers to purchase products before entering the store.

Order will enable customers to pay for food, beverages and other products ahead of time to avoid waiting in-store. An article on Gigaom says you can pay for a meal at a restaurant--including tip--before you even sit down.

This app is comparable to Square's Pickup--a program also focused on ordering goods ahead of time. The difference lies in Order's "location-aware" design, according to Gigaom, which tracks the coordinates of the user and suggests local businesses he or she may like to frequent. This design is also found in the framework of Wallet.

When he launched Wallet in 2011, Twitter founder and Square creator Jack Dorsey thought it would be a big hit. The premise behind such an app? Customers are able to input credit card information on their mobile devices and "pay with their name," as the company states.

Wallet wasn't quite as successful as the mobile payments company thought it would be, according to Gigaom. Apparently customers don't see the point of completely ditching their credit cards to pay for in-store purchases with their smartphones.

Maybe with the added incentive of being able to pay ahead of time customers will take to Order more readily.

An article on ReadWrite suggests that people will continue to use credit and debit cards because it takes the same amount of effort to pay with a smartphone.

"People still carry around their leather wallets because that's what they've always done: They prefer to pay with debit and credit cards because it's just as easy as paying with their phones. The result is that mobile wallets have not gained critical mind share among the public," the article states.

Square's Wallet is no longer downloadable in app stores, but a spokesperson told Gigaom that the company "will continue to support the apps already installed."

Order is coming soon to New York and San Francisco. IPhone users will have the jump on this rollout, with Android following closely behind. The Square spokesperson told Gigaom that the plan is to eventually provide Order nationwide.

So, is there any hope for mobile payments companies like Square? The ReadWrite article offers this: "Mobile wallets like Square are going to continue to struggle--at least until a more legitimate, easy-to-use and cost-effective solution comes along."

For more:
- read the Gigaom article
- read the ReadWrite article

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