It wasn’t all that long ago that the only retail payment methods were cash, check or credit card. Earlier this century, online retailers also were able to accept payments via PayPal and Google Wallet. And, now, all retailers can accept payment via a customer’s smartphone using apps such as Google Wallet and Apple Pay.
With all these changes in a relatively short period, what will payment methods look like in a decade? Let’s take a look at four ways:
- Ecommerce sites will no long have a shopping cart: New payment methods would look and behave much like instant messaging systems, eliminating the need for a third party to complete purchases. Both Apple and Facebook have already adopted this technology. Apples works with payment apps using Siri or iMessanger while Facebook’s is in the testing stage. It would allow payments through Facebook Messenger. Using services such as this one would allow retailers to make checking out as simple as possible. This, in turn, could increase customer loyalty and trust. Customers interact with a chat bot through the messaging systems. The drawbacks to this type of payment is that consumers might be hesitant to interact with a robot, and the systems will present new security challenges compared to traditional shopping cart programs. Source: MatchWatch
- We will live an nearly cashless world: While most financial experts agree the use of cash will be in decline, it won’t be gone. Markets that rely on innovation, such as the Nordic nations, have made the move to a cashless system already, but third-world nations would struggle economically if paper money were to disappear. As people opt for electronic means of payment, the value of physical currency will drop and will be worth little more than the cost of its production. A cashless world will give everyone access to financial services that were once only accessible to the rich. Some technologies that will aid in the transition to a cashless world include credit card apps on smartphones, fingerprint recognition, personalized services and government regulations. Source: IDG Connect
- The Internet of Things becomes the Internet of banking: The internet has made banking and payments more convenient. This will continue into the future as technology increasingly makes devices “smart”. The ATM has been around for decades and 2.7 million are installed globally. The next generation of ATMs will allow banks to decrease their branch staffs. Bank customers will have teller-assisted options on ATMs giving them live access to video support should help be needed. Millennials use smartphones when making purchases at a higher rate than other groups. More than half used the internet to make purchases monthly and 27% used mobile wallet apps to make in-store purchases. Source: Business Insider
- Banks recognize the importance of blockchain: Blockchain, also known as distributed ledgers, is the technology behind bitcoin. It’s also where banks are investing their resources. The Bank of England is investing in moving $600 million daily to a system that is online constantly and is accessible to other banking institutions by 2020. The technology allows the bank to settle securities and provide an easier way to settle payments. In addition, traditional banks are exploring establishing their own cryptocurrencies with the aim of instant clearing and settlement and a more stable financial system. Source: Quartz
Top photo: © Getty Images / Peshkov