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Published: Wednesday, 12/29/2010

Consumers connect with purchases by smart phone, Web

SAN JOSE, Calif. -- When Karl Malden warned on TV, "Don't leave home without it," he meant your credit card. But the 2010 holiday shopping season might be the first time his warning could easily refer to your smart phone.

During the shopping season's final weekend, Dec. 18-19, PayPal saw a 279 percent jump in payments made with smart phones and other mobile devices over last year. The online payment company said this week that it expects customers to make more than $700 million in payments through mobile devices in 2010, up from $25 million in 2008.

That jump comes amid what seems to be another record year for all online shopping. While complete data are not yet available for the holiday season, consumers appeared on track to extend the trend of spending more online in 2010 than they did last year.

Amazon.com said this week that on its peak demand day for the season, Nov. 29, customers ordered a record-breaking 13.7 million items, about 158 items per second. That was a 44 percent jump from the busiest day of the 2009 holidays, when Amazon customers ordered 9.5 million items on Dec. 14. The online shopping giant also said the third-generation Kindle, its mobile e-reader, has become its best-selling product ever.

But this year, mobile shopping became a significant factor.

"We all knew there would be a time when smart-phone shopping would really take off," said Laura Chambers, senior director of mobile for PayPal. "There is no question now that this has really been the year. ... This year has been a crazy year in terms of the growth in shopping with smart phones."

While mobile purchases are still a "reasonably small percentage" -- less than 10 percent -- of PayPal's total volume, Ms. Chambers said "it's growing really quickly" as smart phones become more ubiquitous, as retailers improve mobile Web sites and developers create shopping apps, and as shoppers grow more comfortable with the idea of using a smart phone or tablet computer to buy stuff.

Technology such as the "near-field communications" chips included in the new Nexus S phone built by Samsung and powered by Google's Android operating system, eventually may allow people to buy something by touching their phone to a checkout line sensor, will only help, Ms. Chambers said.

A recent survey of more than 8,000 Americans aged 13 to 64 by Yahoo and the Nielsen Co. found that customers are increasingly using their smart phones within a store, to send photos of products to friends and family, to scan bar codes, and to request coupons.



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