According to a study done by Elon University, smart phones are going to be the payment method of choice within the next 10 years. Despite the fact that the majority of people are still using credit cards and cash to pay for goods and services, the survey found that most people expect tablets and smart phones to be the payment method of choice by 2020.
Changes in Methods of Payment
In the last few years, there has already been a transition from cash, checks and credit cards to online payment systems. Checks are now becoming increasingly uncommon as people have begun using credit cards and debit cards as standard methods of payment. Additionally, with the ability to automatically set up recurring payments online and through online banking websites, many people are even moving away from having to use their debit and credit cards to pay for rent and utility bills.
Alongside the convenience of paying for bills with automated online systems, many people are starting to use systems like PayPal and Google Wallet to handle their credit cards and checking accounts. These systems allow online payments to be made by simply using an account where they can send money from credit cards, checking and savings accounts. Many people suspect that smart phones and mobile devices will be tied to these services as a payment method.
There are some businesses that have already started offering people the ability to use loyalty cards and pre-paid cards using their smart phones and tablets. For example, Starbucks has already launched a program that allows people to use a mobile device to pay for their purchases from a Starbucks account. They have stated that they are seeing great success and the program has been well received by customers.
What is Holding Mobile Payment Systems Back?
In spite of the fact that people are clearly interested in and accepting of Internet based payment systems, there are a few issues that are holding people and businesses back from fully adopting these methods. The first issue is security. While phones have become more and more advanced in terms of encrypting data that is sent through wireless systems, RFID, which is required for these transactions, is not yet completely secure.
RFID sends data over short distances, but there are still some circumstances where this information can be intercepted. Until there are more security checks put in place for these types of transactions, many companies and individuals are going to be hesitant to take advantage of mobile payment methods. There are a number of companies that have already started working on these issues, and standardized RFID security systems are expected to be in place in the near future, taking care of these concerns.
The only other real issue that prevents people from using these payment systems is the limited number of mobile devices that are RFID capable. The Apple iPhone 5 is expected to have this ability, and there are already several Android and Windows based phones that have this ability, but they are not the majority of the smart phone market. Since more RFID ready phones and RFID security protocols are expected to roll out in the next few years, the expected adoption date set by the Elon University study seems to be right on target.
Karl Stockton writes for http://www.insuranceswami.com.PS: Digging this story, news or review? Let us know! Comments open.
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