As the wireless mobile world expanded, I doubt that the smartphone manufacturers had their eyes set on mobile banking, let alone mobile payments. As the devices became more sophisticated and powerful, their capabilities grew and so did their expectations. Suddenly creative minds started asking, "What if," we could use our devices for banking – checking balances, transferring funds and eventually even pay our bills…that scenario is already in our rearview mirror as we drive on to bigger ideas. Please don't think for one moment that the banks and businesses are pushing this for our convenience – although they can use that as a marketing ploy – it makes their job easier and running their business cheaper. Do you know how many banks have closed down or tellers that have lost their jobs because of ATMs and mobile banking – plenty. Why would customers want to leave their cozy home and drive to a bank when they can throw back their recliner, push a few buttons and their transactions are done.
Banks really pushed for online banking (OLB), but that was just the first step in customers using their smartphones for money transactions. Businesses are now a driving force behind paying online with our smartphones – it is easier for customers to make a purchase as there is no need to enter a bunch of confidential information on the web and we are more likely to make a purchase if it is easy and we feel that it is safe. Those two items lead to more sales, more convenience and safer purchasing…and with everything done electronically it makes each transaction cheaper. Years ago, if you wanted to order something over the phone, you actually talked to a human and verbally give them your payment information over the phone – now, what used to take a person and several minutes, happens in a matter of seconds with no human intervention…other than you, of course. There are over 6 billion people with smartphones and even more credit cards – many people store all of that information on their smartphone, so why not use that information to make a purchase at an actual vendor. Rather than carrying your credit or debit cards around and waving them in front of a reader, why not wave your smartphone over the reader instead – keep those credit cards at home where they are safe. Certainly, you could have your smartphone stolen and you could also be robbed, but you cannot sit at home and hide – well, you could, but that would not be healthy.
Studies by VISA show that Americans are twice as likely to be carrying their smartphone as cash and that figure jumps to four times as likely in the 18-34 age group. Mobile payments doubled between 2012 and 2013 to $1 billion – a figure that is expected to rise to $59 billion by 2017. Smartphones are just the beginning – NFC chips can be embedded in the new wearable technology, such as a watch, ring or Google Glass will all be making payments in the near future. Another push for mobile payments is coming from the government – cash business often elides the cash register, the accounting records and therefore the I.R.S. Don't even get me going on the Bureau of Engraving and Printing – they spend $660 million to produce new notes and $2.9 billion is spent to mine and mint coins and $260 million is lost to counterfeiting. Cash no longer needs to be replaced if transactions are done electronically so there is a huge savings to our government.
Less cash transactions, means less money in the cash registers and that may even lead to less robberies and there is no need to rob people's wallets if all they are carrying are family pictures and a few old receipts – no cards, no cash, no incentive. Sure, there are drawbacks to all forms of transactions, even digital ones. Computer records are vulnerable to hackers and your smartphone or wearable could still be stolen. Advances in security at the time of purchase and storing of our information will increase and while the evolution of digital payments will advance at a rapid rate, it will not render cash extinct. Not everybody owns a smartphone and 10-percent of Americans and 50-percent of the world does not even have a bank account. Homeless people, charities, the Salvation Army Santas, etc. all need cash to survive…I guess we could always swipe our phone by a high-tech kettle. Please hit us up on our Google+ Page and let us know if you are fine with making electronic payments with your smartphone or do you prefer using cash or credit card…as always, we would love to hear from you.