The Future of Mobile Payment Technology

Do you remember the RPG Shadowrun? Well, maybe you don’t unless you’re a geek like me. One of the concepts in the game was the credstick. It was a small device you carried that held your money and your personal information. You’d use it to buy things and transfer money.

Sounds just like a smartphone, doesn’t it? But you’d need more than just the smartphone to pay. You’d need a point-of-sale infrastructure designed to support it.

Sounds just like Apple Pay and Android Pay, right? But they’re not the only ones jumping into the automatic POS business. Many smaller companies are developing app-based point-of-sale systems, and not just for things like that last Uber ride you took.

Take car washes, for instance. Matt D’Souza, president of Washify, a company with a mobile app for car washes, says, “Businesses can allow customers to use their smartphones to buy washes in advance and schedule detailing appointments. Once they show up, the POS system communicates with the user’s smartphone or an RFID tag in the car to claim the purchase. It allows us to track everything, and keep up with our customers’ growing desires to be independent of a traditional POS system.”

Why are these systems, called mobile payment systems, so popular compared to how we’ve done it for decades? Here’s a breakdown.

Faster Checkouts

The biggest reason is convenience, and in this realm convenience equals the speed of the transaction. The faster they can get from the initial desire to the completed purchase, the higher the satisfaction rate of the experience. We don’t want to wait in line. We definitely don’t want to wait for checks.

We also don’t want to fumble around too much with new payment systems, especially if they’re problematic. You probably have a chip card at this point, but many places still don’t accept the chips yet. Or some machines do and other don’t. This is despite pressure from credit card companies to shift the liability for fraudulent transactions to merchants who do not have chip systems in place.

But with smartphone POS systems, all the user has to do is place their device near the kiosk and the card information is read from the mobile wallet in the smartphone. A fingerprint verification system is then used to verify that you are the one who owns the displayed card. If verification works, the payment goes through and you’re on your way.

Send Money Anywhere

Mobile payment devices aren’t just being used for shopping either. They’re starting to replace cash in other forms. Consider the app Venmo. Venmo is a mobile wallet app that lets people give and receive money to other people. It’s most common use is to share money with friends like for a cab fare or for splitting a restaurant tab.

This is just one of a number of different mobile wallet applications that are all fighting for supremacy in the market, but certainly the convenience of being able to send money to anyone remotely is a big feature. We’ve all had the experience of needing to borrow five bucks or giving it to someone. These apps connect straight to your bank account or to whatever amount is stored in the wallet so you can give out the money whenever. No trips to the ATM, no saying “I’m out of cash.”

Once some company overcomes the challenge of making their application just as useful, secure, and accepted as cash is everywhere, then our smartphones will truly become credsticks and we’ll definitely be living in the future.