What do you think payments will look like in ten years? The first 20 replies to this thread will get a $10 Starbucks card.
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I like the idea of a dream scenario, so I'm going to follow that lead. I feel that wallets and billfolds are on it's way out way faster than most people think.
Enter dream:
It's a warm summer evening, about 7PM and the sun is setting in my rear view window. I'm driving down the road and it's warm out. My windows are all four rolled down, and I'm listening to Sailing, by Christopher Cross when suddenly my seat vibrates, notifying me that I'm near one of my pre-selected hotspots, "Trader Joes On the Go", a new fast food drive through. The HUD hologram display on the windshield of my 2027 Honda Civic shows the Trader Joes fast food logo and alerts me that it's 5 miles ahead. A quick tap with my finger and the music fades out.
"What would you like to order, Mark? Please speak your response or say 'menu', and I'll read you the menu", it proclaims.
I already know what I want so I declare, "one coffee with heavy cream, a bag of kale chips, and spring rolls".
"Thank you for your order. It will be ready when you arrive. Please drive through the pre-paid lane."
When I arrive, the Trader Joe's geo-tracking system recognizes my car and a real person (not a robot) hands me my meal, and I turn Christopher Cross back on and continue to my destination: a lake side bonfire gathering with all of by good friends (or something).
Honestly, if this were a real dream of mine, it would be much more strange! But I do think geotracking and smart cars, and voice activated payments are all going to dance together harmoniously as they extract funds from my account, and I'll hardly notice that I'm getting poorer every 5 miles that I drive.
Hmmmm.... I love the idea of AI and voice activated payments... but I honestly think the form factor of payments (i.e. physical cards) will change into something that is much harder to hack or steal...think biometrics. Maybe you pay with a retina scan or a finger print like what many gyms already have. Your fingerprint is definitely unique to you. Two thumbs up for paying with your thumbs! (insert thumbs up emoji here)
I think payments in the future will be entirely cashless, wireless and cashless. The idea of physical cards or devices to make payments may seen antiquated in the future. What ever becomes of the mobile phone/smartphone in the future, payments will follow suit. Mobile payments and smartphone technology will continue to merge, until the wallet is no more. Certainly wireless payments, where you can swipe your phone or device to pay will become standard.
I agree with previous comments that the future is cashless (not that cash is going away, just used less and less) and cardless. The shift is already moving towards mobile payments, and I don't see that stopping anytime soon. I'm hoping this trend continues, because as more and more retailers accept Apple Pay, the less and less I have to carry my physical credit card. I could also see payments being made using technology similar to, for example, the EZ-Pass on turnpikes. You have some sort of reader you carry (maybe in your phone) that identifies you as you, and when you walk through the sensor, the money is taken out of your account automatically. This of course has potential issues, as do all payment methods, but it would help getting in and out of places faster. With the way that payments have changed in just the past 5 years, I'm excited to see what the future holds.
I suggest that future payments will be wireless, cashless and based on crypto currencies. It may play out as a plethora of currencies that a world organization like a super-central bank will need to sort out. It may, however, leave the zero-proof characteristic of crypto currency behind in favor of a 3rd party (to the transaction) who will maintain an audit trail and may play a role in validating the exchange.
As always, payments innovation will occur in areas where there is still a lot of friction in payments. Take the case of healthcare payments. Let's take a scenario where one gets admitted to a hospital for some ailment and is seen my multiple specialists. Each specialist ( e.g. Cardiologist, Anesthesiologist etc..) bill the patient separately and imagine the scenario where the patient is charged for services that were not rendered. The patient has to keep track of multiple payments and there is back and forth exchange between the patient, payers and providers.
There are several process improvements underway such as bundled payments where intermediaries like payfacs have a big role to play. In Bundled payments scenario, a payment is made for a specific health episode and there is a lot of technology play here where the providers and payers & providers have to realize how to stay competitive in such a market. Healthcare providers have limited visibility of patient interactions across multiple healthcare providers and physician visits since the solutions operate in silos and do not provide a comprehensive summary. Analytics has a huge role to play looking at the patient history across multiple healthcare facilities and hospitals that he/she has visited and then offer the best treatment while not being penalized by one lump-sum payment. This is one area where providers - payers will work together to make the payments simpler and easier!
I have been asked this so many times on the ATM side and have worked the progressive movement in mobile and digital money for over a decade. My thoughts have not changed and I have watched them become a reality. Monetary exchanges in cash/check will become a thing of the past. For security purposes, all cards will be issued digitally and a tangible card will no longer be needed. All ATM transactions will be initiated with a pin that is issued on the spot by a card issuer so that it can be entered in to the ATM and cash withdrawn without risk of entering a PIN and someone watching or skimming the PIN. This is already happening today. Point of sale and online transactions will be completed in the same fashion. It will not require that real data be entered for the payment method, but rather, it will be a payment that is issued by a dynamic PIN issued by the card issuer for a one time payment to the merchant or service provider.
That being said, it takes time to get to a point where the issuers and the switch can execute a transaction in this fashion, and this development and meeting new compliance standards will be the only hindrances to a full speed marketable solution. The future use case is to allow this to be a payment solution that is devoid of penetrable data capture.
I think it's all a lot closer than we realize. If you look at WeChat in China I think that model, roughly, is the future. Venmo is catching on in the US. I think there are security implications. I think there are some major hurdles that need to be cleared. But transferring money just using your phone/computer/tablet is the way forward.
Cash isn't going anywhere.
It's hard to see credit cards completely disappearing any time soon because the platform (WeChat, Venmo, etc.) may not be international. But at that point you're sort of relegating credit cards to the role traveler's checks currently play. So I see it all as an eventuality.
Note: these are my personal opinions and my personal guess at what payments will look like in the future and do not reflect the opinions/guesses of the company I work for
Definitely AI driven, and cardless. The authentication will most likely be a combination of facial recognition and voice print. To avoid the problems of whether someone authorized something or not we will most likely have to say something specific, much like when writing a check: "I, John Smith, authorize paying Acme Inc. $19.95."
This could easily be recorded and manipulated so I think would certainly be combined with some kind of biometric as you said. I can also see it relying on a bio-chip we have implanted, though, maybe a private key we are always walking around with to sign things. This would also work over the Internet or between two parties when the network is temporarily inaccessible (would merge into some kind of block chain later, maybe).
Actually, since voices can be recorded and even facial recognition could be fooled, possibly a "verbal Captcha" could be used that would require the customer to dictate two random words during authorization.
I'm looking forward to having ALL my credit, debit, points, store cards all on ONE smart card. Maybe even Identification on it too. I have the contactless phone app for Credit and Debit from my bank, used it once in 2 years when I forgot my wallet at home. Phone devices are just to bulky, too expensive. I just don't like fumbling through my phone, putting in passwords, thumbprints, making goofy faces etc. while standing at the till and don't like taking it where electronics shouldn't go such as the beach. Some apps are easy, some are down right difficult. When I scan my card, the payment device should ask which card I would like to use and perhaps the balance available on each card. Then security settings I desire depending on the card and amount, ask for a PIN or some other biometrics.
I also think AI will have a pretty big role to play, and that we'll move away from physical currency for the most part in an increasingly digital age. At some point I think we'll probably just be able to make payments by thinking that we want to, and then our brain chips and the robots will take it from there.
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Huh, that's weird. Some guy just came through a portal and said something about John Connor and the resistance in the future. Probably nothing to worry about, right?
My biggest bet would be on mobile wallets. IT has always been the biggest transformation and revolutionizing the way people shop.It also got the retailers excited more than the customers.
For immigrants like us, digital money transfer to abroad countries is another industry that might pick up. Digital Remittance of funds to families and friends will increase in the coming days.
With so many hacks and breaches, security concerns and updates to the way card payments work is going to be important. With EMV launch, card brands across world have already added a microchip to get an extra security layer.
I can definitely see mobile wallets gaining in popularity. I see any technology that replaces the need for physical cards as an interesting development.
If there is a way that card brands can find to make having a digital card safer than a physical card then it seems like we'll make that jump. The chip readers have already been a step in that general direction, but the idea that the intermediary processing the card doesn't end up with the data needed to use the card again in the future is compelling. Of course, we'll still have to deal with people losing phones and passwords and everything else.
I can't see the physical cards going away anytime soon, but it seems like that's the trajectory we're headed.
I agree, I think mobile payments is going to be the future of payments, with the dream of real time payments ( in its true sense). We are already seeing many of the ISVs, VARs and ISOs looking for the next mobile payment technology. Many mentioned that security should also be part of payments, I wholeheartedly agree! We can't lose sight of security and what we can do in payments to prevent the man-in-the-middle attacks, fraudulent cards (EMV), and lost or stolen.
The real reason payments by phone will never take off. People will actually have to stop talking on them while going through the cashout line.
I believe AI will mitigate a ton of processing space in the years to come pertaining mainly to the PayFac model. Hybridization will occur with traditional ISO’s.
The future is bio-metric, finger or iris scan will be enough to process the payment.
Cash and physical credit cards will continue to be around while digital payments will be more prevalent. We may also see more adoption of cryptocurrency and biometrics.
If you look at the technological advances in the the last 20 years and project what the next 20 years might bring us, I think no one in this discussion is going far enough. Everyone is still thinking in the box.
Envision everyone, except those living off the grid, having a chip in their body added either subcutaneously by injection or ingested in pill form. Your body's internal electrical activity powers the chips, so they last a lifetime. Counterfeiting is impossible, since it is tied to your body and likely also tied to a global tracking system, so the banks/card networks know where you are (Big Brother would be watching - 1984 in 2028). If the system knows where you are and a counterfeit chip appears trying to make a purchase at a different location, it is blocked.
Cashiers and POS devices become a thing of the past, as items you pick-up are scanned by sensors as you leave the store and the charges made automatically. Computers also have built-in sensors that identify you for online purchases no matter what system you use. Simple and convenient, though admittedly, more than a little scary.
This might seem a little crazy, but the technology already exists, just having to be refined and built-out. And, each generation seems to be willing to surrender a little more privacy in exchange for "simplicity".
Seems like bio-hacking (cloning whatever unique signal the chip gives out) or worse(!) bio-jacking (illegally stealing chips from medical patients, and people desperate enough to sell them) would be the new counterfeit in that brave new world.
Honestly, I am extremely down for any future with computer implants, tattoos that change color and shape with your mood, neon-drenched cities, overcoats, clear umbrellas to protect everyone's cool hairdo from the constant drizzle. Basically I just want to be in Blade Runner.
When I saw in the news a few years ago that payment companies were considering chip implants I mentioned it to a colleague who then, quite seriously, told me that he would never, ever allow that because that would be the "mark of the beast":
“He was granted power to give breath to the image of the beast, that the image of the beast should both speak and cause as many as would not worship the image of the beast to be killed.
And he causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, and that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name.
Here is wisdom. Let him who has understanding calculate the number of the beast, for it is the number of a man: His number is 666.” (Revelation 13:15-18)
So I expect there will be a not insignificant portion of the population that will be against the idea of chip implants.
Jim,
Thank you for writing the plot of my next screenplay! You just blew my mind.
Stand in line. I've already started the novel. Of course, if you get done first, I expect an honorable mention, or maybe a character naming. ;O)
Really nice pull, that is a fascinating connection.
I'll kick this off - I think that AI is going to make a huge mark on payments in the future. This is my *~dream*~ payments/AI scenario:
I'm on vacation in Italy. I already alerted my bank that I was going to living like a queen overseas for a week, thanks to an instant notification that popped up when I booked my vacay on my travel app. While I'm noshing on delicious sardines and red wine, I get a notification that there was an attempt to use my card in Monaco, but that it failed due to top-notch AI-enabled fraud detection and facial recognition technology. No worries, my card issuer has already changed my card number and the new card is ready in my mobile wallet.
After I finish my meal and and head out to bop around the piazza, I get a notification from an AI bot in my music streaming app. One of the bands I recently favorited is playing tomorrow night a mere 5 blocks from where I'm staying. Would I like to book tickets? I book the tickets with the new card that's stored in my mobile wallet, and look forward to the show tomorrow.
I stroll off into the sunset of a glittering frictionless future and everyone looks like an actor in Blade Runner because of all the cool futuristic fashions.