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Digital wallet apps slowly catching on in America

| Saturday, July 27, 2013, 9:00 p.m.

KANSAS CITY, Mo. — Mark Logan ordered lunch at Mildred's Coffeehouse & Bistro in Kansas City's Crossroads Arts District and stepped to the register to pay.

No cash, check or plastic.

Logan paid with his smartphone. He had loaded it with his debit card information, using a mobile application called Square Wallet, and snapped his picture.

To make the payment, Square Wallet sent Logan's picture to the iPad that Mildred's uses for a register. The iPad tied his tab to his photo.

The barista, seeing Logan, tapped his photo from among several customers on the screen and told Logan the payment was going through. A second tap, and technology took care of the rest.

“This is dead easy,” said Logan, whose receipt popped up on his phone.

So why don't more of us pay with our phones?

Mostly, we don't know we can. A recent survey of smartphone users found that half had never heard of the idea of a digital wallet, let alone downloaded and used one.

And few stores or restaurants take them.

All the same, you may use one soon. Money is making a dash from pockets to smartphones, thanks to digital wallets such as Lemon, Isis, LevelUp and others.

The Carlisle & Gallagher Consulting Group forecasts that within five years, half of smartphone owners will prefer to pay for gas, food, gadgets and other consumer goods with phones and mobile wallets.

That's a big leap, and a lot needs to happen before then.

Several technologies are competing to migrate money to smartphones and they don't mesh. By one count, perhaps 280 digital wallets or more have sprung up or are in development around those various technologies. Some retailers, notably Starbucks, have built apps for mobile payments.

It leaves consumers and retailers guessing which digital wallet the other will use. Unless they match, it will be back to cash, check or plastic.

Consumers in Japan pay with cellphones more than Americans do, said Ray Ledford, an American who lives in Japan: “Anytime you're there, you'll see somebody using it during the day.”

If the digital wallet is really going to catch on here, it has to do more than pay the tab. Advocates say successful digital wallets will need to help consumers save money, become savvier managers of payment choices, earn discounts and coupons and increase their value as customers.

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