Are You On Board With the Future of Payment Systems?
Apple Pay made its much awaited debut in October 2014, and as with everything Apple does, the conversation on alternative payment mechanisms has gained center stage.
Is there even any credence to all the clamor about new payment mechanisms? What happened to good ole' cash, checks and credit cards?
Business Insider's data on cash payments shows that the usage of cash is set to decline at a rate of 1.1 percent on a compounded annual basis. Check payments, the mainstay of the formal payments economy for about a century, are declining much more rapidly at 10.8 percent.
Ryan Rommann writes in an interesting piece in Forbes that Americans are twice as likely to carry a phone as cash; the figure goes up to four times for millennials.
According to Accenture's study on payment mechanisms, 40 percent of consumers have already used their mobile phones as payment devices in 2014. This number zooms to 52 percent among millennials. The same study goes on to reveal that nearly 80 percent of users would switch to mobile payments with the right incentives (i.e., discounts and coupons).
Here's a rundown of the popular emerging payment technologies:
1. Mobile wallets: Very few of us haven't actually used a digital wallet - PayPal anyone? A digital wallet holds money in digital form in your account and allows you to pay for things you buy online. The primary benefit of a digital wallet is the security it offers users. No payments are released till the goods are delivered. Since you don't give your credit card number to the merchant, there's no chance of fraudulent transactions either.
Taking this digital wallet concept to the mobile space, Google launched its Google Wallet for Android devices in 2011. Users can link their bank accounts or debit and credit cards, loyalty cards, coupons and store credit notes to Google Wallet and pay at retail outlets by simply tapping on a near field communication-enabled point-of-sale (POS) machine and entering their personal payment PIN. No swiping cards, no counting out change!
Rohan Ayyar is the regional marketing manager for India at SEMrush. His blog, The Marketing Mashup, covers digital marketing from the perspective of B2B, B2C, lead generation, mobile marketing, SEO, social media, content marketing, database marketing including predictive analytics, and conversion rate optimization. In addition, he'll look at emerging marketing technology and how marketers can use it. Reach Ayyar at email@example.com.