No more wallets? Digital payments are taking over

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!

Aditya Luthra


  1. Aditya, this is truly the next frontier with payment systems for the financial industry. The real challenge these days is the security and protection of the data, and ability to integrate into the platforms used by certain institutions. My bank is definitely not on the cutting edge of technology…we are far from the early adopters. Rather, we let others test out the technology first, see what challenges pop up, then adopt once the technology is well vetted and secure for our customers. I know we are looking at these options, in particular P2P payments and Apple Pay, but not sure when we are going to implement it. Thanks for sharing your post!

  2. Digital payments are making life a lot easier. No longer do friends have to constantly bother their peers to go to the bank take cash out and pay them back, Now, they can just request a payment through venmo. The friend simply clicks accept and the transaction is complete.No exact change, bank visit, or annoyance necessary.I love this app! I’m also a huge user of the Starbucks app. If there are two coffee shops next to each other part of the reason why i will go into the Starbucks is because of the ease of the payment process. It is also nice that I do not have to remember my Starbucks loyalty gold card every time I make a purchase. Thanks to the app, i now automatically get rewards without giving the cashier my loyalty card. I always forget my loyalty card or forget to show it to the cash register at stores that do not have this digital payment method. This is extremely annoying. Apple pay is one form of payment I have not used yet. I am not sure how comfortable i feel with this type of payment just because it is so closely connected to my bank account. For my Starbucks app I add the money on myself which allows me to monitor it more closely and feel safer about the payments.

  3. I’m also the kind of person who rarely carries cash and hate when I’m standing in line and someone in front of me pulls out some cash to pay. My eyes roll into the back of my head … they might as well be paying with a check. I’m a frequent Venmo/Uber user and wonder what my life was like without them. Uber has truly revolutionized the cab industry by improving several major pain points in overall convenience (ie. not only do they pick you up, but payment is automatic). I’ve also yet to try Apple Pay, and due to security concerns, it may be awhile for me to get there. I am curious when/if RFID Credit Cards are going to be adopted/take off in the US. Within the last several months I received chip-in replacement cards for all of my major credit cards, but every time I’ve tried to use it at check out I’ve been told to swipe it instead for a variety of reasons (ex. clerk doesn’t know how to use it, “it’s broken”, etc.). I wonder how long it’ll take for this tech to take hold in the US.

  4. Aditya, I think that was a really comprehensive look at the increasing trend toward digital payment – whether it be peer-to-pay money sharing or actual purchases with the retailer on the other side. Whenever I look at this trend, which certainly has a well-defined target market, I always have to figure out how the digital payment company is looking to convince the more risk averse that this is a solution they won’t regret. Like @liuqqbc mentioned, privacy and security are huge concerns for users – and they should be. With companies being hacked continuously making the news, why should a person be incentivized to put more trust in the technology that has failed for even larger companies (coughsonycough)?

    My trust certainly isn’t there yet – but I’m definitely not the target market. I don’t even use online bill pay. At some point I’m sure I’ll be pressured to make the switch, by banks themselves, but until then – tangible cash is king.

  5. Really enjoyed this blog post! Digital payments are becoming more and more of the norm. I have been using PayPal for many years, both personally and as a small-business owner, and so I was a bit hesitant when all of my friends started getting Venmo because I didn’t see the point. Now I am completely sold. While it is essentially the same product as PayPal, the social element makes it extremely appealing to college students and other individuals my age. Combine that with the lack of a fee and it’s not hard to see why it’s taken off. I, myself, have stopped using cash and now find myself frequently in the same situation you described: paying with a card and being venmo-ed by my friends. It’s very in-line with how everything is trending towards convenience.

  6. Funny that you mentioned Venmo – I just thought about it today as I was coming up with potential topics for my posting for this week. What I find interesting about this app is the fact that it made banking ( or at least one aspect of banking: the small amount transfer ) social. Although most major banks have their own apps that allow the same function ( for example, I use the BOA app where money transfer is equally easy), these banks have operated for decades under traditional thinking where the focus of all efforts typically fall on convenience and privacy. Venmo is smart by tapping into undiscovered consumer needs and doing quite the opposite – they allow users to share publicly or among approved contacts the purpose of the transaction. I noticed that the narrative use of emoji has become common practice on Venmo and I think it definitely has facilitated the social aspect of it – it doesn’t come as a surprise though, since the millennial are all about portraying a good self image, and that image usually includes fun and social popularity.

  7. Aditya, thanks a lot for sharing this post. It is really astonishing to see how much the world around us has evolved and changed in little time. Few years ago we didn’t have phones, but today we do almost everything on our phones. As I was reading your post, I remembered how reluctant I was to putting my credit card number and information on such apps. I fought downloading Uber for a while, and stayed so long before I downloaded Venmo too because of the fear of privacy. But after a while I felt I will be left out if I don’t use these apps, and so today these apps are embedded into every aspect of my daily life strongly. Next step on my list are the reward payment apps. Thanks for sharing. Great content and very true final takeaway!! Really enjoyed this read.

  8. Nice post. The title caught my attention because I’m one of those people who likes to carry as little around as possible. I rarely have any cash in my wallet, and when I do, it’s never more than 20-40 bucks. I have seen the usage of mobile payment rise significantly in my peer group over the past few years. My 4 roommates use venmo for everything, from utility/rent bills to splitting dinner. Personally, I haven’t tried apps like ApplePay or the rewards program for Dunkins, but I think these things have grown in popularity and will become commonplace in 5-10 years. The one restraining factor will be the security issue, as people are reluctant to put their credit/debit card information into unfamiliar applications.

  9. Although I’m a huge proponent of going cashless or even wallet less by way of mobile payment options, I don’t really find them all that innovative. I have a number of cards in my Apple Pay, reward membership apps to a few chains and peer to peer money sharing accounts like Venmo and PayPal (even though PayPal owns Venmo), but all they really end up doing is saving the time it takes to swipe a card, or take out some cash. All of these services are no more than extensions of our current (or past) buying methods that, with the exception of Apple Pay (requires Touch ID), further drop the bar of security required to access our money. I’d bet on the fact that people leave smartphones behind more so than wallets these days, and with an un-mandatory 4-bit password being the only thing standing between whoever finds that phone and the owners mobile payments, it’s kinda scary. In my opinion, the future of how software should interface with payments should take place in the world of authentication. Anything that can verify beyond a shadow of doubt that the person making a payment is the one entitled to the money being spent is what we need. Early cryptocurrencies such as Bitcoin got very close using a block chain and ledger, but abstracting this backend to make the casual user fee in control of their finances on a mobile device is yet to come.

  10. I confess that I’ve been a bit underwhelmed with Apple pay. Not only do too few places accept it, I have found it to be a bit unreliable when I try to use it. Probably won’t stop trying, though. It certainly is alot easier than carrying cash or credit cards. Now all we need is a drivers-liscence app and I can do away with my wallet altogether.

  11. I’m quite wary of payment apps because each one is yet another spot where my credit card (or worse yet, bank account information) is stored. Although I’m daily customer, I don’t use the Dunkin’ Donuts app and, despite complaints from my roommates, I don’t use Venmo. 99% of my purchases are done with my physical credit card being swiped, with the remaining 1%, well, let’s just say that cash is king sometimes. Realistically, I don’t see wallets going away altogether any time soon for a whole host of reasons, including the fact that some businesses are still cash-only.

    The worst part about payment apps though is the fact that some people just can’t seem to grasp the concept of having payment ready for the cashier. Just this morning I was on my way to work and a customer at Dunkin’ Donuts held up the line because she had to fumble around her purse for her phone, took several tries to unlock it, had to scroll through pages and pages of apps to find the right one, wait for it to load, navigate to the payment screen… Rather frustrating when you’re behind someone like that and running late for work!

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