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New Ways to Pay

Posted by Flux on 

11 September 2013

1_green_watch2pay

What’s trending now?

Do you remember writing a cheque at the grocery till? Can you recall balancing your accounts in the tiny lines provided in your cheque book ledger? When was the last time you went into the bank to draw cash before heading to the shops? There is a fair chance you haven’t done any of these things since… well, if you’re under 30, you have probably never done these things.

And now, the financial big wigs of the world are commissioning new ways to pay – all of which seemingly make it easier for consumers to spend.

Why it’s important

Most people have got half a dozen (if not more) cards in our wallets. And although several years ago these would have primarily been credit cards plus a bank card for drawing cash, almost everyone has made the switch to debit cards for their primary purchasing needs. Seems easy enough, doesn’t it?

Except now, developers are making it even easier to spend, without carrying a single card or any cash. Wearable wallets are now found in watches and bracelets, and there is every reason to suspect that this will be simply be the transitioning step to implanted payment systems.

At least two watches, the Rumbatime Perry Go (Visa) and the LAKS Watch2Pay (MasterCard), have been released on the market with varying reviews. In principle, you link your accounts with tiny chips in the watch, and you pay via the contactless swiping mechanisms which are now ubiquitous throughout the US. Although, it does appear that the kinks haven’t been worked out of the gadgets yet.

However, there have been some successes with Disneyland issued MagicBand Bracelets, which function in the same way. The idea behind this was initially brand loyalty; but, ask anyone who has carried a wallet just praying it wouldn’t be swiped out of their pockets, and it is easy to see the consumer benefits.

What’s the butterfly effect

The obvious effect of this is the ease at which people can find themselves slipping into financial trouble. However, additional apps may just help to alleviate this strain. For example, the DebitBand  links to your debit card and allows you to set a monthly budget. As you get closer to reaching your limits, the band becomes tighter, physically signalling the financial crunch at the end of the month.

Moving forward into the future, this would be an option for providing children with valuable budgeting experience. Provided parents can regulate how much children can spend, this could replace piggy banks altogether. Although, today’s children may just be the last generation to carry wallets at all.

As early as 2006, 8% of teenagers were open to the idea of financial microchip implants. Of course, the Daily Mail survey reporting these statistics may not have been universally representative, but it does signal a fundamental change in how the next generation views money and the necessity of ease in the buying process.

Of course, the downside of such accessories is that they are not necessarily any safer to carry around than your wallet, or a cleverly hidden debit card. And as soon as hackers get the hang of stealing information via radio frequency, it could be a free for all.

The pioneers

One can expect an all out brawl between MasterCard and Visa in the coming years. And with other leading name brands looking for a piece of the action, such as Disney and McDonalds, it won’t be long before smaller players are forced on board.

The global hot spots

The United States is ahead of nearly every other country when it comes to contactless payments, and self-payment options, though several UK chains have picked up on the trend. These areas, along with Japan will naturally become the first to implement wearable payment systems. South Africans will have to wait awhile, as contactless payments are nowhere near implementation (and self-payment options could seriously impact already untenable unemployment rates).

By: Katie Schenk

About Katie

KGB - Eastside
Katie is South African by choice, but she’s proud of being American too. She’s a writer, a producer, and a momma. If she can shut off – she sleeps. Her interests include advertising, home economics, entrepreneurial processes, South African idiosyncrasies, and rugby. (Really.) She’s also a fan of Tudor history – but there’s nothing trendy (or trending) in that.

Image credit: http://money-watch.co.uk/

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