When Mission Impossible debuted in 1996, the film wowed audiences with high-tech gadgets such as Jetson-like transportation pods and eyeball-scanning identifiers. Twenty-three years later, this futuristic technology is becoming more common, with the evolution of self-driving cars and face scanners on our smartphones.
Whether you’re an early or late adopter of technology, the reality is that computers, cloud-based programs, the internet, and artificial intelligence have all evolved — integrating seamlessly into our daily personal and business lives. Shopping is no stranger to this evolution. Today, we rarely write a check and most of the population has never experienced manually running a credit card through a 1980s “knuckle-buster” carbon machine.
Today, approximately 26.66 billion connected devices exist globally, with this number projected to rise to 75.44 billion by 2025. With more and more connected devices, the way we shop will continue to evolve quite rapidly. Some futuristic payment technologies have already entered the marketplace and others are becoming more widely accepted with each passing day. Let’s look at what the future of payment technology holds.
The future…is now.
Some revolutionary digital payment technologies are already in use, such as EMV chip cards, NFC contactless payments, and mobile wallets. EMV or “chip card” payments allow consumers to insert or “dip” their card into the chip reader of a credit card terminal, removing the need to swipe the card’s magnetic strip.
NFC (near field communications) are a contactless payment method, allowing communication between the payment terminal and smartphones, tablets, or smartwatches. NFC technology allows for the exchange of encrypted payment information without physical touch. The consumer simply waives the card or smart device over the payment terminal and the purchase is completed securely.
Often, consumers use NFC technology to process mobile payments and use electronic wallets, such as Apply Pay. According to Business.com, millennials are 2.5 times more likely to adopt technology earlier than older generations, as evidenced by almost 50% of millennials preferring mobile payments. With millennials responsible for more than $600 million in annual spending, watch for more common uses of these payment technologies to emerge over the next few years.
Wear your payment method.
Wearable payment methods, such as those through Apple Watch, are increasing. Although more than 60% of Americans disfavor a cashless society, this technology is more popular with younger generations. For example, in 2018, at least one-third of (or 23.8 million) US millennials used a wearable device at least once per month. That number is expected to increase to 28.9 million US millennials by 2022.
While smartwatches are the most common wearable payment method currently used, look for other wearables hitting the market, such as the Visa Payment Ring. With NFC-enabled payment information stored within it, this wearable device delivers convenience and security with the tap of a finger. According to Visa, “no battery needed, no recharging necessary.”
Skip the checkout line.
Why not just grab and go? With Amazon Go, customers can walk in a brick-and-mortar store, select what they want, and walk out. Through deep learning, sensor fusion, and computer vision, Amazon’s “Just Walk Out” technology detects the items you select, places them in a virtual cart, and charges your Amazon account upon leaving the store. Very Mission Impossible indeed.
As of now, Amazon is testing this technology in specific Amazon Go stores in Illinois, New York, California, and Washington. With this technology, consumers can purchase select groceries and prepared meals without ever waiting in a checkout line. Although this technology is hardly pervasive, it’s a glimpse into the future of shopping.
Shop while being social.
With an estimated 2.77 billion people using social media globally, it’s no wonder that people can now make purchases through platforms such as Instagram and Pinterest. Without leaving the app, consumers can buy items simply by clicking “shop now.” Shoppers will no longer have to scour the internet searching for items for their home, yard, or closet after seeing a post on social media. Instead, consumers can now scroll and shop through mobile payment gateways.
Let’s look at Instagram as an example. Instagram is known for its visual storytelling and engaging stories. BigCommerce.com recently reported that the social media platform has 800 million active monthly users, 500 million daily users, and five million active business profiles. Sixty percent of Instagram users discover a new product while scrolling and 70% follow at least one business profile.
Hootsuite recently reported that 34% of Instagrammers are millennials and 38% of all users check the platform multiple times a day. With 95 million posts per day and 4.2 billion daily “likes,” it’s no wonder that social media is the next digital shopping frontier.
What is coming next for payment technology.
Now, let’s jump into some really pioneering payment technology, as if the above options aren’t cutting-edge enough. You may have heard of implantable, radio-frequency-identification (RFID) technology. We currently use this implantable technology when tagging livestock or placing a chip in our pets in case they get lost. But what about RFID payment technology?
This implant is about the size of a grain of rice and is placed under the skin. Previously, a company called Verichip created a microchip implant containing personal health information. However, as the technology expands, scientists and inventors are discovering other options for this technology, such as using it to open your car door or store financial information for shopping. Although there was some talk about using subdermal microchips as replacements for credit cards ten to fifteen years ago, this use has not driven the conversation as of late. But never say never.
Another form of innovative payment technology on the horizon is the iris scanner. Biometric technology and authorization have been around for decades, but they’ve become more commonly accepted in the financial industry over the past few years. Iris scanning builds a digital customer identity, making financial authentication simple and secure.
In addition to iris scanning methods, biometric technologies also include fingerprints, face recognition, and voice recognition. Think about your smartphone. You’ve probably used fingerprint or facial recognition to unlock your phone.
For shopping, this technology gives consumers additional options to authenticate and verify their purchases, while making online shopping easier by eliminating the need for remembered passwords. Additionally, researchers at Carnegie Mellon University are developing scanners that can capture your iris from 40 feet away. You could walk into a store, have your iris scanned from across the room, and start shopping.
The emergence and evolution of digital transactions have disrupted payment technology. No longer are payments relegated to transactions between banks. With new fintech companies competing with traditional financial institutions, consumers continue to have more payment options, whether they’re shopping in a brick-and-mortar store or online.
Customers want their purchases to be convenient, fast, and secure. With players such as Amazon, Apple, Google, and PayPal changing the way consumers experience purchases, businesses today are more mobile and versatile than even ten years ago. Integrating digital payment technology into your business will help you increase your revenue, attract more shoppers, and decrease your administrative time—allowing you and your team to focus on high-level issues.
At NAB, we can help guide you through the setup of cutting-edge payment processing, providing you with seamless integration. We have the technology you need to adapt to consumer behaviors by accepting payments in the modern world. We’ll help you tailor your payment processing systems to your specific business, giving you peace of mind today, while preparing you for the future of payment technology. To set up a consultation, contact us here or give us a call at 877.840.1952.