If you’re anything like me, you don’t really like carrying cash around. You go into the store, grab a soda, and pay with your credit card even though you might have a couple dollars in your wallet. Why use your credit card when you have cash? Convenience. Most of us don’t want to lug around change, so we pull out our credit or debit card. But it seems that even pulling out our card has become too much work because companies are constantly finding new ways to make our lives more convenient when it comes to payments. There’s a lot going on in this space, but I picked a few topics to focus on. I picked a couple digital payment methods I frequently use, and a digital payment method I’d like to try. Check them out.
Retail Reward/Payment Apps (Person to Business): I have experienced this myself as an avid Dunkin Donuts coffee drinker. One day I walked in and they told me I could hook up my credit card to the Dunkin Donuts app on my phone. Then they told me I could put my phone on auto pay so that my account would be credited with money every time it was running low. And then they told me each drink I bought with the app would give me reward points that I could eventually redeem a free drink with. All this was on my phone, and even though Dunkin Donuts is probably secretly tripling their revenue from me, I found it pretty cool. Because of convenience and incentive, I found myself going to Dunkin Donuts and refilling my account more often. All I do is show them my phone after I order, they scan it, and then I wait to get my order. Meanwhile, I’m racking up reward points that will get me a free drink. And when I do get one, the scan code shows up on my phone. (I’ve claimed about 10 free drinks by now…I go a lot). This same concept of payments through mobile devices by attaching credit card information is used with companies like Uber.
Venmo- Social Payments (Person to Person): In my opinion, Venmo is something every college student needs. It allows you send and request money from person to person, by directly linking your bank account to your phone. It’s also like a social profile. I link my bank account to Venmo as well as add a profile picture, and then I am eligible to receive or send money to someone else with a Venmo account. The key with Venmo is that although transactions linked to credit cards have a 2.9% fee, transactions linked to debit cards are free. So for everyone who links their Venmo to their debit card, sending and receiving money is essentially free. The reason Venmo is so great for college kids especially is you can track and send money right away. If you’re at dinner and want to split the bill by meal price, instead of wasting time and having the waiter figure it out with 5 different cards, one person can pay for the meal using their card and everyone else will Venmo that person the appropriate amount of money. Also if you owe someone an uneven amount like $5.67, instead of giving $6 in cash, you can Venmo exactly $5.67 to the recipient of the transaction. With each transaction, you must leave a note saying what they transaction is for (people often have fun with this and type irrelevant things). Also you can click tabs to see what your friends are paying for, what people around the world are paying for, and also your payment history, all in a newsfeed format. Transferred money sits in your Venmo balance and you can cash it out at any time. Venmo is growing in popularity; this past summer in three months, Venmo facilitated $1.6 billion worth of transactions.
What I want to Try:
Apple Pay: Apple pay allows users to store their cards onto their iPhones (virtual wallet) and use that to pay during transactions. The differing factor with Apple Pay is that it does not need an apple-specific contactless payment terminals, existing payment terminals can be used. The payment system works by using a near-field communication (NFC) chip-contained in the new iPhones that will also be embedded in the Apple Watch. NFC is a type of wireless technology that allows you to send mobile payments over a short distance to a store or restaurant’s corresponding reader, which accepts these payments once you’ve confirmed them. In order to send a payment, simply hold or wave your phone at one of these readers while keeping your finger on the Touch ID — the home button. Apple says that 220,000 stores accept Apply Pay, and that this number is growing. This is the future and will change the culture of searching for your wallet when it’s time to check out.
With everyone glued to their Smartphones, companies and startups are finding ways to enhance the consumer experience when it comes to payments. Common payment methods are becoming outdated, and new technology is bringing the future of digital transactions to us, faster than ever.
Thanks for reading!