By ANNE KADET
I used to be such a frugal lady. Then I subscribed to Amazon Prime, an online-shopping service that offers unlimited two-day shipping for $79 a year. Before Prime, I went to Amazon.com for the occasional book. Now, I'm a shopping zombie, loading my virtual cart with coffee, sheet music, chewing gum, bike lights, electronics and fingerless gloves. I'm buying stuff I'd never bother going to the store for -- did I really need a used copy of Dolly Parton's autobiography? In the 18 months since I subscribed to Prime, my Amazon spending has tripled, to $1,274.
The problem: Prime makes it way too easy to spend. You click a button and -- thunk! The item arrives at your door within 48 hours. It's like magic.
Amazon won't tell me whether I'm typical, but I know I'm not alone. The Web is lousy with comments from conflicted shoppers who say their spending went through the roof when they signed on with Prime. "It's very dangerous!" says Nick Holland, a mobile-payments analyst with Yankee Group. The genius of Amazon -- beyond the reliable service -- is that it gets folks through checkout too fast for them to reconsider an impulse purchase.
This is nothing new -- you might call it the Monopoly-money effect. The further technology takes us from the psychic pain of forking over actual cash, the easier it is to spend freely. Studies show that consumers are willing to pay higher prices and leave bigger tips when paying by credit card. People using American Express's signature-eliminating ExpressPay key fobs up their spending at participating merchants by 20 to 30 percent.
We're just getting started. The latest technology makes it even easier to shop without thinking. The new Starbucks app lets you pay for coffee by scanning a bar code on your phone screen. Google and PayPal are rushing to market with "mobile wallet" technology that lets you pay with a tap of your smartphone, as is Isis, a consortium of cell phone carriers partnering with MasterCard and Visa. Technology from start-up outfit Jumio lets you pay online by flashing a credit card at your computer's Web cam, a technique that founder Daniel Mattes says will encourage more impulse shopping. And some futurists say it's only a matter of time before all payments go digital. In Amsterdam, entire shopping strips are going cash-free. Can a new wave of consumer debt be far behind?
The new payment technology isn't just a ploy to encourage more spending, of course. Providers say mobile wallets will speed checkout lines, inspire creative new loyalty programs and help retailers manage inventory. If the pastry shop has too many crullers, it can zap out a discount-doughnut offer. Jaymee Johnson, marketing head for Isis, says there's no reason to believe folks will go bananas with mobile payments -- the process is no more abstract than using a credit card.
Indeed, some hope the new technology will actually help us control our spending. David Birch, a director with payments consultancy Consult Hyperion, says the mobile wallets will aid awareness, since they can provide a continuous stream of balance updates and transaction data.
But that assumes phone payments are the end of the line. Analysts say that in the not-so-distant future, we'll be transferring money with pinky shakes and voice commands. You could talk your way straight into debtors prison! Maybe we should take a tip from Holland, who says he still starts his nights with a trip to the ATM, and stops when the cash runs out. Bet he never wakes up next to Dolly Parton.