For ten thousand years, humans have relied on physical currency in order to complete a transaction, whether we used a few copper coins or a stack of Benjamins to get it done. With the advent of the Internet, however, physical currency has become less and less practical each day. Not only does e-currency and mobile payment plans have the potential to eliminate cash altogether, digital payments may soon replace every other type of transaction — checks, credit cards, and money orders.
Mobile Payments Today
A few years ago, you had only one or two choices for making payments when it came to online shopping. Either you plug in your credit card digits, or you link your PayPal account (which, itself, often depended on your credit card digits) in order to seal the deal. Today, it’s become the hottest trend amongst the largest tech corporations in the world, with computer and web developers tripping over themselves to produce a mobile payment system that’s exclusive to their software or operating system. There’s no question the potential for a mobile payment revolution exists — ten million Americans have grown leery of banks and rely exclusively on cash and prepaid credit cards, and of those, two out of three utilize mobile phones. As such, the only question is when consumers will buy into the idea and set off a tipping point.
Anyone who has seen any science fiction film or television show has seen characters who pay for everything from lattes to fusion reactors simply by having a device scanned — whether that device is implanted in their corneas or brain stem or strapped onto the side of their blaster. Mobile money has the potential to eliminate the bulk and time consumption and waste of physical money, and the benefits shouldn’t be overlooked as trivial. A cash economy cost Americans $200 billion per year, to say nothing of spreading diseases and mitigating economic gains when sat upon. A digital economy can help developing nations, furthermore, by facilitating payments in areas where cash is less efficient or less prevalent.
The Big Guns
Who are the rising stars of the digital payment revolution? You may have already guessed many of them who are already the forerunners in the tech world. Apple Computers, leader of seemingly all digital innovation in the world today, announced they would create a pay system for their iOS platform before the end of 2014; Facebook acquired WhatsApp for a twenty-billion-dollar figure (that’s billion, with a B) and is believed to be turning it into their own pay platform. Google actually hit the bricks first with a mobile payment system called Google Wallet nearly four years ago,to give mobile payments to the masses. Smaller companies like mPesa have changed the way that millions of people around the world can transfer money on their mobiles: mPesa transfers more money across the globe each day than 34 different banks.
Into The Future
Gaze into the crystal ball and what will you say about the future of mobile payments? They’re certainly here to stay; the Federal Reserve itself has suggested it to be a major lynchpin of the mainstream financial service. The bigger question is who will first create a mobile payment system that takes off in a big way; Bill Gates believes Apple Pay will be the effort that gets mobile payments to critical mass. Some first attempts, however, have stalled: Google Pay doubled in size in only a few months, but has yet to hit more than 20 million users. It’s not clear yet what style and mechanics consumers prefer for mobile payments, but a number of large corporations are racing to find the perfect formula.