Are wallets soon to be a thing of the past? If the rising popularity of mobile payments using your mobile phone is anything to judge by, then the humble wallet is in for a 21st Century makeover. One that involves smartphones and NFC technologies.
For more evidence that mobile payments will be coming to a pocket near you, check out our infographic.
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The future of payments is here and it’s not buried within your wallet or purse. It lies in the hands of your modern Swiss Army multi-tool: your smartphone.
Mobile payments are making their way into our everyday lives, with Google leading the way on this frontier. Launching soon, Google Wallet, an Android app that securely stores all your current credit information in your phone, allows you to make payments with a simple “tap” of your mobile device.
The technology is based on NFC–Near Field Communication, which allows for the exchange of data when two devices are in close proximity to each other.
During the unveiling of Google Wallet, Stephanie Tilenius, VP of Commerce at Google, declared that 2011 marks the future of mobile and, if you look at the numbers, it’s easy to believe.
In 2009, mobile payments made up only 0.5% of the total e-commerce transactions. However, in 2014, mobile is predicted to increase from $1.2 billion in transactions to $214 billion, equalling a 1.5% total share of the e-commerce market. Obviously, the market is growing and will continue to do so.
Google Wallet plans to transform the shopping experience, allowing you to lighten your pants and ditch your wallet in favour of your phone. In the meantime, companies like Square are making a wallet / credit card hybrid. Twitter co-founder Jack Dorsey developed the plastic square to fit into your phone’s standard headphone jack, allowing you to swipe standard credit cards between the plastic square as your phone decodes the cards information and processes the transaction. Square has seen rapid growth within their short history, now with nearly 3 million transactions per day.
However, with the news of Google Wallet, some would believe that Square is just filling the void in the interim, not destined to have a long shelf life. In the very-near future, mobile payments will inevitably require no add-ons for you to impulsively buy those shoes you know you don’t need.
The biggest question that arises with mobile payment is that of security. Can we trust mobile? How do we know that our information won’t be stolen? When you lose your phone, won’t that put you at an even greater risk than ever before?
According to Google, no. “In fact,” their website states, “Google Wallet’s security features go beyond what’s possible with traditional wallets.”
Our future: simpler and safer. Allegedly.
It sounds a little ideal, and I won’t put it past hackers and con artists to devise a way to easily steal my information; however, all I can do is trust and yield the best of my common sense (no, sir, I don’t want to buy those pair of sunglasses that are hanging from the inside breast of your trench coat).
As stated on the Google Wallet website, we’re on the brink of the next big shift in the way we make payments. As new companies and organisations recognise the powerful future of mobile, we, as consumers, are lightening our pants, ditching our wallets, and relying solely our phones.
One last thing: I’m not sure it’s time to completely write off handbags – until, that is, phones come with pre-loaded chapstick. Now that will truly be the future of mobile!
Andrew is Co-Founder of CreditCardCompare.com.au, one of Australia's leading websites dedicated to helping consumers 