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Payment Technologies of the Future
With the technological breakthrough of the recent years when the whole world has become mobile and tech-savvy, time has come for payment technologies to experience changes.
By: EliNext Group
No need to say that along with the increased volume of sold gadgets we observe an immense growth of e-commerce as it is faster, more convenient and less time-absorbing to make purchases online. In Japan only, about 10 million mobile subscribers have already taken advantages of paying for purchases with their smartphones and the reports are saying that by 2015 the mobile payment industry will be worth a trillion.
The technological breakthrough of the recent years has created a new kind of relations between the merchant and the customer – virtual relations. It is now obvious that it is just a matter of time before we embrace the idea of switching from cash payments to virtual ones. Norway has already announced its intentions to refuse totally from cash by 2020 and only cards will be used as a method of payments there.
The world around us is changing and the payment technologies are changing. The world goes mobile and the payment technologies also become mobile. That is the main reason why most of recent developments in the sphere of payment technologies of the future are inextricably connected with mobile industry.
The list of payment apps of the future is rather a long one, nevertheless most of them are yet on the stage of development and it is yet to see what they will be. So what are the main payment technologies of the nearest future and how are they going to alter our lives?
1. Firstly, such payment systems as PayPal, Square, and Intuit Go Payment have already proved to be efficient and popular and have started to provide their customers with credit card readers that plug into the headphone jack of smartphones. It will definitely be ideal for small businesses on the go and by 2015 it is predicted that the gross profit from the sales of these devices will reach $670 million. No surprise that Google Checkout and Amazon Payments will also try to get in on the action.
2. Secondly, NFC or Near Field Communication, without doubts, will conquer the market in the nearest years. The system is rumored to be built into the next version of iPhone and is expected to be released later this year. NFC will allow you to store your payment information on your phone, enter your pin when you’re ready to pay, and tap your device to any NFC-enabled payment system and payment is done. Payments via NFC are expected to reach $320 billion by 2016. And there is no need to have an Internet access as systems like PayPal’s Beacon and Apple’s iBeacon, use proximity-based Bluetooth connections instead.
3. Thirdly, Bitcoin and similar payment systems. Such innovations as Bitcoin ATM that can convert any currency into bitcoins and KryptoKit which is an in-browser Bitcoin wallet that automatically scans Web pages for Bitcoin payment addresses and fills in the information required for the purchase. So all a user has to do is click to confirm – they will push payment systems like Bitcoin ahead. However, Bitcoin goes through hard times now as many similar rival payment systems have been launched and have turned the market into a real battlefield.
4. Fourthly, Biometric payment systems like the iPhone's fingerprint-
5. Fifthly, QR code – scanning system where you can scan the QR code with your smartphone and have your item bought within seconds and shortly delivered to you.
While most payment technologies of the future definitely center around smartphones and mobile apps, some of the payment technologies will stay aside from them.
Analysts predict that the future of payments are in a smart watch, ring, or Google Glass as it would be easier to use them rather than a phone as you would not have to take it out from a purse or pocket — simply tap, swipe, or blink an eye. The Turkish Bank Garanti in cooperation with Mastercard have already created the Bonus Trink Watch, which uses MasterCard's contactless payment system, PayPass, and allows to pay for anything you want without digging out your wallet.
At present we observe competitive battles among different payment systems. But due to the fact that mobile payments doubled between 2012 and 2013 to $1 billion, the nearest future of payments, without any doubts, is connected with Mobile industry. EMarketer predicts mobile payments will top $58 billion by 2017, and phones are just the beginning of e-cash. Developers of payment technologies of the future claim those new payment systems and apps will be more secure and easy-to-handle than the present ones. Nevertheless, only time will show all the pros and cons of those new payment technologies and only time will show which payment technology will become the leading one.
While many proactive businesses have already started to adopt new payment technologies, there are many companies which are rather slow while adopting innovations. The new emerging systems have the capacity to offer more customer insights, help to establish a better relationship with customers and allow to easily accept international payments. With new payment technology innovations less time will be spent on cash handling, more on customer services and that is the greatest advantage payment technologies of the future can bring into our life.