Money makes things happen, always. From the moment the first click took place and a transaction was made the online and offline world have embarked on two individuals paths with the same destination: the checkout.
To understand the issues involved consider the facts that our relationship to money is always an emotive one and the way we pay determines the process which a company uses to make us part with our money.
When we pay using cash, credit card or cheque there is a direct emotional connection being made between us and the money we spend. Simply put the action which physically connects us with our money and the number of steps required to make payment becomes a psychological barrier which makes it harder for us to part with it.
To compensate for this barrier companies have to work really hard at gaining our trust, convincing us of the value of their products and their competitiveness, and it’s hard work. This is why online payments are so much easier to get. Provided you have the right products and pricing, customers do their own due diligence and then come to you, ready to make a purchase. Whether the payment is made via PayPal or Google Checkout or the one-click payment ease of sites like Amazon, the result is the same: a seamless, painless transaction which makes it easy for us to part with our money.
This kind of ease is something ringtone companies and adult phone service operators have understood very well. Prior to smartphones, the ease with which we could download the ringtones we needed to customize our phones made the Crazy Frog sounds a global hit and many an enterprising ringtone company, rich. Payment in those cases was taken over the phone, appearing in the phone bill of the user.
Offline is the new Online
Mobile payments, of course, are not new. But in the past they were not easy to make and the only convenience they provided was to be able to make some online purchases remotely. The real online payment action always took place when we were anchored at a desktop.
Smartphones and tablets untethered the individual from his desk and enabled us all to take our computing power which includes, online profiles, digital friends, search and online payment capability, with us.
What next bridged the gap were a number of payment systems which turned our phones into wallets. The reason this relatively small step became groundbreaking lies in connectivity. While computers and laptops (and to some extent tablets) require the cumbersome mechanics of a wi-fi connection in order to work for us, phones are always on.
Convenience is a Driving Factor
Phones already can unlock and start cars thanks to apps and car manufacturers have been making app-friendly cars for some time now. With phones acting as keys it is only a relatively small step before they also begin to act as proper wallets, containing cash.
Phones make the perfect payment device because they can interact with computerized payment systems using NFC technology right at the Point of Sale (PoS). They offer a secure payment environment and, in a step which further blurs the lines between being offline and being online, allows us, through apps to make full use of coupons, discounts and loyalty cards by assimilating them, digitally, in the phone environment.
Google is trying to achieve just this with Google Wallet. The video below draws the idea in broad, and somewhat exciting, strokes.
Google has been buys signing on credit card companies, to pull this off and is rolling out the service in the US and, slowly, across the globe.
In Europe, the EU just approved project Everything, Everywhere, which will be developed by Vodafone and O2 which will enable mobile phones to act as a valid alternative to cash, credit cards and cheques.
By making money invisible and the paying process easy the stage has now been set for the next step of development, when phones also become the place which holds our passports, driver licenses and medical documents. In short the online and offline world will seamlessly meet in one device which is always present. We will be able to use it to make a payment, or prove who we are, no matter where we are.
It will happen because, from a money point of you, it makes perfect sense.
Digital wallet 'Project Oscar' scheme approved by EU
Amazon Mobile Services
PayPal Mobile Payments
When Will Your Smartphone Really Replace Your Wallet?
Unlock your car with your phone
Near Field Communication (NFC)