Adrian Wyld
These are heady days for futurists trying to predict the future of cash.
The meteoric rise of smartphones and growing confidence in e-commerce have led to a Klondike rush to devise new ways of extracting money from willing consumers' wallets.
By most accounts, widespread adoption of the most high-tech of these visions – a world in which smartphones are waved at terminals instead of wallets – is a few years off.
But that's not the only mobile-commerce initiative afoot.
Here are three things to watch in the interim:
Pre-commerce
Here's a buzzword you'll be hearing a lot more of in the years to come.
Before mobile payments, there are going to be all kinds of other mobile shopping activities. If e-commerce is the act of using digital technology to make a purchase, then pre-commerce is the catch-all term for all the digital shopping that happens before the customer gets to the register.
"Shopping is about to change substantially," says Darrell MacMullin, managing director of Paypal Canada. "People are walking in off the road with a barcode scanner for price comparison."
Some forms of pre-commerce are here already: UPC and QR-code scanning apps are a reality, and scannable codes are turning up everywhere from grocery stores to bookstores.
Consumers are already well-accustomed to using the Internet to compare products, something that's only going to get conducted on the fly more frequently as mobile websites, apps, and hardware improve.
Others are still en route.
Geo-aware marketing – a long-promised idea – might soon arrive, sending offers to customers' mobile devices as they walk past a storefront, or through a store's front door. (Customers would probably have to download an app first; uptake of such a system would depend on their tolerance for digital flyers arriving on their doorstep.)
Similarly, customers might soon find themselves in control of detailed information about real-world inventory at retail outlets, without having to go in and ask. eBay Inc. acquired a hot startup named Milo that interfaces between companies' inventory systems and the public-facing Internet, saving customers the hassle of phoning around for a product. (This would make a perfect app for an iPhone 4S, if you could figure out where to find one in stock.)
Interim solutions
Not all the pieces of the new world of mobile payments at the cash register have landed yet. The industry is still shaking out, and technical standards haven't been completely settled upon.
But that hasn't stopped some firms from charging ahead. Starbucks Corp. is implementing a mobile system that does an end run around the digital wallet technology of the future. Starbucks uses an iPhone app to turn the mobile device into a virtual Starbucks card. Customers create an account and load it up with store credit; at the till, the app will display a barcode on the phone's screen, which the cashier can scan with a barcode reader, debiting the customer's account.
More elaborate technologies coming down the pipe will allow consumers to pay by tapping the phone to a reader device – but proprietary solutions like that of Starbucks could beat them to the punch.
More ways to pay
Companies like PayPal and Visa are taking a technology-agnostic approach to the future of mobile payments, working to build up platforms for e-commerce that can be used with whatever devices consumers end up toting five years down the line.
So while tap-to-pay solutions hog the limelight, they're not the only ones in the offing.
For instance, PayPal is working on a system that will allow customers to show up at the till with no physical payment card at all – and simply offer a phone number and a personal access PIN, which the merchant can use to debit a PayPal account online using computer equipment they already have.
"Merchants love the idea, because they don't have to do anything from a technology standpoint," Mr. MacMullin says.
The widespread adoption of digital wallets might also lead to the spread of the kind of retail experience customers are already having at the Apple Store, in which purchases happen on the store floor and receipts are e-mailed instead of printed.
Digital wallets run by major entities like Visa, PayPal or Google would mean that it would become practical to centralize that experience through the payment provider to apply to all purchases, and not just those at a single, tech-savvy merchant.
But there is life beyond smartphones. The wallet-less future might be overstated, for the simple reason that smartphones go dead, and nobody wants to be out a wallet when their iPhone dies.
Lower-tech alternatives will persist, whether plastic or paper, or metal. Coinage has been around for at least two millennia. Smartphones won't dispatch it quite yet.
Special to The Globe and Mail
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