This is a guest post from Susie Brown, FastUpFront.
Until the invention of checks and credit cards, the concept of payment processing has remained pretty much the same for thousands of years. Whenever consumers wanted to pay for something they could either trade for it, or they could buy it with money. When the credit card came onto the scene it completely changed the way people paid for things, and it changed the way people thought about money. But through it all, there is one thing that consumers could always rest assured would not change much: The wallet.
What is a Wallet?
This is the TheFreeDictionary.com definition of a wallet: “Wallet- a small folding case, usually of leather, for holding paper money, documents, etc.”
Had you asked a caveman from thousands of years ago to define “wallet” he would have told you about the same thing. However, the definition of “wallet” is changing. The online mega-giants, PayPal and Google, are stepping out of the virtual world, and attempting to make the old-school wallet obsolete by facilitating commerce through mobile phone wallets. These digital wallets could be the wave of the future — especially as smart phones are rising in prominence.
The Double Sided Coin
The new possibilities that the mobile wallet concept will create will come with their positives and negatives. Here are some of the ways that commerce will be affected by the mobile wallet:
- Security: Mobile wallets are protected by a security code, which ads an extra element of security compared to the traditional wallet, which, if stolen, allows easy access to money and credit cards. Could there be a danger of hackers obtaining access to other people’s mobile accounts? Since the mobile wallet is still very new, just how secure they are remains to be seen. Ironically, the mobile wallet’s higher level of security than a regular wallet creates the rather ironic danger that the mobile phone owner could lose access to their account if they forget their code.
- Convenience: Indeed the obvious advantage of being capable of spending money so conveniently and effortlessly also creates the danger that consumers will overspend as a result. The mobile wallet creates a particular danger for shoppers with gadget obsessions, since making payments with a mobile wallet is actually fun in that techie computer-gamey type of way.
- Price comparison: PayPal and Google are taking the concept of online product search offline. If you are not familiar with the mobile phone scanner, it works like this. Say, for instance, that you find a beautiful yellow shirt in your local WalMart, but either the price or size is not to your liking. Through a simple mobile phone you can scan the shirts checkout code a find out about other locations that you can buy the same type of shirt. The big advantage is that the system also tells you the prices and sizes available in competing stores. This handy option makes bargain hunting all the more efficient.
The mobile wallet will be transforming the future of spending; along with the financial advantages will also come new dangers too. What are you going to do about it?
Susie Brown is a FastUpFront Blog contributor and business consultant. Fastupfront specializes in business loan financing and business capital based on future sales.