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No More Plastic – Transitioning to a Card-less Wallet
Swiping a card or entering a credit card number whenever you want to make a purchase can get tiresome. Fortunately, we will have to do these actions less and less. Digital wallets will free us from carrying physical wallets and entering credit card numbers online just like credit cards freed us from having to always carry cash. And mobile payment systems like Square, Intuit and PayAnywhere are making it easier to pay digitally everywhere.
Several large firms have jumped on the challenge of creating a great digital solution. Google announced their digital wallet last May. Visa jumped into the market in November of 2011 by announcing their V.me digital wallet and opening up their developer center. MasterCard introduced its solution, PayPass Wallet Services. American Express has its own take with Serve. And even the mobile carriers have entered the fray with Isis, a joint venture between AT&T, Verizon and T-Mobile. PayPal has also announced a more robust digital wallet as well as mobile card reader.
The mobile payment space has been going through a pricing war, with new players like VeriFone’s Sail announcing multiple payment options for businesses using their service and the more established Pay Anywhere dropping its flat rate fee per transaction. Square stated June 14th that it is processing over $6 billion in payments annually. Intuit’s GoPayment announced earlier this month that it has integrated its system with Quickbooks Point of Sale 2013 to give businesses that use their system access to more robust capabilities.
All this is great for consumers and businesses alike – more competition means better and cheaper services. These services allow for a one-stop shop for all your payment related tasks. PayPal’s new digital wallet will allow consumers to set up rules for their transactions to dictate which payment options to use for different types of purchases. The wallet will also let you change your payment selection after a purchase has been made. Everything from store credit cards to gift vouchers, coupons and loyalty points can now be stored in one spot. In this way, PayPal is actually a proxy for your preferred payment method.
Aggregating consumer financial data is beneficial to both the consumer and the financial institutions/other companies that hold the data. The consumer is getting a unified financial experience – all their credit, debit, loyalty, etc. cards can be in one place. This will allow for greater oversight and better/smarter/more informed financial decisions.
For the companies holding this consumer data, there is a wealth (pun intended) of opportunities. By exposing this data to partners such as advertisers and retailers, companies with digital wallets can serve ads to their consumers based on their shopping and spending habits. They can also match consumers with the best credit card, mortgage and savings account deals. As Visa and MasterCard are already doing, digital wallets can be opened up to developers so that they can be incorporated into apps, shopping sites, games, etc. The options are vast. The only thing required is a secure way to transfer data. Once again, APIs are at a forefront of a digital revolution – this time in the consumer and business payment space.