Future of payments
With the sudden rise of different payment options, such as Alipay, WeChat, Afterpay and many others, one can’t help but ask the question, what will be the future of payments?
But before we do that, let’s first look back at the history of payments.
Before the introduction of currency as a medium of exchange, a combination of barter, debt and the gift economy was used by societies, dating back over 100.000 years ago. It was only from 3000BC that currency was introduced, in the form of the Mesopotamian shekel (unit of weight, approx. 160 grains of barley).
In roughly 600BC the first gold and silver coins were made. The first banknotes (arguably) came into existence somewhere between 150BC and 700AD, either in Carthage or during the Tang and Song dynasties, relatively quickly followed by the check in the 1800’s.
More rapid developments in the payment industry have really taken off in the last 70 years, with the introduction of the Diners Club credit card, the first independent credit card company in the world, which was launched in February 1950. Many consider this to be the green light which started a surge of innovation in the payment landscape.
Over the last 18 years, the rise in online spending has gone hand in hand with the development of new payment methods. Each payment method offering USP’s which decrease thresholds, improve UX, remove friction and/or offer complete/additional services.
This surge in innovation seems to be at its peak, with various companies designing their own payment methods (Alibaba, Amazon etc.). Looking at these developments, one can only wonder what the next step will be.
Payments integrated with IOT
A clear common issue new APM’s are addressing is improving the UX.
I see a lot of potential in the implementation of frictionless payment methods combined with IOT integration of everyday household appliances. For example, there are refrigerators that can register what is in your fridge. A relatively small step further is having a fridge that can automatically add out of stock items to your online shopping basket and settle the payment on a daily, weekly or monthly basis.
A further step could be that the refrigerator detects if and when it needs servicing, sources the net for a maintenance company nearby and synchronises this in your agenda. You would only need to open the door to let the mechanic in unless you have Ring of course.
Furthermore, the possibilities that voice-activated payments offer have yet to scratch the surface, despite rapid developments in this area. It will be interesting to see how the optimism I hear regarding these developments will interact with the recent issues surrounding data security as a result of Facebook’s and Cambridge Analytica’s data leaks.
Voice-activated payments also have some other challenges…
A tweet from the U.S. Press Secretary, Sarah Huckabee Sanders, springs to mind:
Probably not quite how it went down, but funny nonetheless.
Personally, I am very excited about the potential that voice-activated payments offer, and I think it will offer great opportunities when properly combined with biometric security solutions.
All in all, the development of how people pay has seen a remarkable accelerated change over the last 70 years, and it will be interesting to see how this development continues. I’m sure some Silicon Valley tech giants have an ace up their sleeve… (or maybe that’s a Voice in my head?) I’m excited to see who comes out on top!