Electronic payment systems are convenient and secure. So why is acceptance slow?
Making money – and we do mean printing your own currency – is a crazy idea. Fraught with problems. Controls. Design. Counterfeits. Legality. Acceptance. Those in favor say it stimulates the local economy and protects against economic uncertainty. But as an competitor to electronic payment systems, it is an idea coming too late and will soon make way for newer technology. But does printing your own money really work? Apparently so.
CNN, in an article describing, How to start your own currency, says,
All across the world, from hipster American communities, through colorful UK neighborhoods to small German towns, people have been using homegrown currencies to stimulate local spending and protect against economic uncertainty.
Printing money notes will continue to fade away as electronic payment systems begin to really catch on. When printed cash is completely bypassed we will have earned the title of a cashless society. How will consumers use technology to make their purchases in the near future? Once again CNN favors us with an answer. Though each of these answers are viable, demonstrated by strong financial consumer support, they have their problems. Acceptance is still slow.
Biometrics will probably become the standard as the cashless society’s electronic payment system. No card to lose or smart phone to have stolen, biometrics are never left at home, constantly available to you and uniquely you. Consumers can make a biometric transaction in just a few seconds. Sweden’s Quixter reads the vein patterns of your palm. As a precaution of double security, you enter the last four digits of your phone number before scanning.
Wristbands are a part of wearable contactless payment devices meant especially for low level purchases. In the UK Barclaycard’s bPay wristband can be used at more than 300,000 locations including shops, bars, cafes and public transport. Here is an electronic payment system which has caught on at a popular level, but only for transactions less than $50. Big transactions are a problem.
Mobile phones have long been in the market of electronic payment systems. Google Wallet is a mobile payment app introduced in 2011 clearly meant to replace your cash-filled wallet. It can digitally store credit cards and gift cards, and provide options for payment where accepted. Once again, though a viable methodology the problem seems to be general acceptance of the electronic payment system itself.
Starbucks has an app specific to their store which is scanned at the counter. But the PayPal Beacon moves that idea up an order of two. It uses Bluetooth Low Energy (BLE) that connects to a customer’s PayPal app when the customer enters the store. The smart device notifies with a vibration or sound that check-in is complete.
When paying, the customer simply notifies the store they are paying with PayPal and the purchase is completed. Though a growing technology, BLE and PayPal Beacon are not available everywhere. Large retail stores are connected to older legacy technology that represents a sizeable investment for the chain and a problem for electronic payment systems of the newer sort.
Visa payWave for Mobile is another contactless payment system aiming to make transactions faster. It simply requires users to wave their device in front of a contactless terminal to complete their purchase.
This area of contactless cards – simply waving a card at a reading device – has the biggest adoption in retail purchases. The technology, known as near field communications (NFC), has been around for some years, but has only recently taken hold. Juniper Research reports that 249 million cards will be used for contactless payments in 2014, accepted by UK, Australia, Canada and Poland.
Acceptance of the idea of using technology to bypass actual money meets opposition from people at all levels. An interesting holdout is Apple. They have yet to release an NFC equipped phone, simply not supporting the technology.
A fascinating Infographic from CNN, Is a cashless society in the cards?, points out the spread of electronic payment systems both by age and by geography. Younger people have in large part already made the transition. Geographically, the US is at 80% adoption of electronic payment systems, while Brazil is at 57% and Belgium 93%.
The biggest problems? As with every technology, growing acceptance takes time. Familiarity, security, retail and consumer buy-in. Spurring lack of acceptance of electronic payment systems is the genuine concern regarding security issues. So many large breaches of security continue to appear that one can’t help but wonder at the wisdom of putting all their electronic eggs in one digital basket.