Amazon to fold its mobile-wallet app beta on Wednesday

The closure comes amid rocky efforts by tech companies to expand into the financial industry.

Amazon will pull the plug on its Amazon Wallet beta on Wednesday, six months after it launched the limited mobile-wallet effort.

The Internet retail giant began informing users by email on Tuesday that it is shutting down the beta and removing the app from app stores. The beta’s closure comes as Silicon Valley companies struggle to expand beyond their roots selling products or services and into the lucrative financial industry.

“We have learned a great deal from the introduction of the Wallet and will look for ways to apply these lessons in the future as we continue to innovate on behalf of our customers,” Amazon spokesman Tom Cook said in a statement.

Amazon did not address whether or when Amazon Wallet would return. Users will still be able to use any gift, loyalty or membership cards store on the app, but wallet balances will no longer be updated after Wednesday, meaning users will have to track their own balances.

Quietly launched in late July, Amazon Wallet allowed users to store and manage gift, store and loyalty cards for in-person and online transactions involving the cards. However, unlike its competitors in the mobile payments niche, the app could not be used to manage credit or debit cards.

The promise of turning smartphones into true digital wallets — including the ability to pay at the register — has been hyped for years. By 2019, consumers are expected to use mobile-payments services to conduct $142 billion in transactions, up from $52 billion in 2014, according to Forrester Research. But so far, it’s been more promise than results.

Google was one of the first companies to offer mobile payments, with a service called Wallet, but the offering failed to gain traction with consumers. Apparently hoping to bolster its efforts, the Internet giant is now reportedly in talks to acquire Softcard, a mobile payments venture backed by wireless carriers that has struggled to catch on.

Online payments business PayPal has tinkered with ways for people to use the service for real-life transactions in addition to transferring funds online or through its mobile app. However, it too has struggled to turn itself into the preferred mobile wallet for consumers.

Apple upped the ante in September with Apple Pay, which allows consumers to make credit card purchases with an iPhone 6 or iPhone 6 Plus. Less than 72 hours after its debut, 1 million credit cards had been used on the service. However, Apple got caught in the middle of a long-simmering feud between retailers and credit card companies a few weeks later when pharmacy chains Rite Aid and CVS disabled consumers’ ability to use Apple’s mobile payment platform.

Author: Steven Musil
Source: CNet