2015 will be year of the eCommerce and mobile payments
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Unless you’ve
been living under a rock (and, yes, withhold your judgment because I lived
under a rock for many years), you’re aware at this point that payment
processing has changed considerably since the first physical credit card
terminal in the 1970s. We still use
those old terminals, yes, but now there are other ways of accepting credit card
payments that revolve entirely around the internet, where the cards being used
don’t even have to be there. Nowadays, in fact, you can log onto someone’s
website and buy something from their online store with just a couple of clicks;
you can walk into a retail store and hold your phone to a scanner and complete
a purchase. Your credit card numbers are
scrambled and stored in an electronic vault, and, if anyone touches your
information, your bank usually lets you know seconds after the occurrence. The way payment security and convenience has
advanced in the past decade or so has been simply astounding.
Today I want
to focus on eCommerce payments and mobile payments because these two payment
methods in particular represent the zenith of payment technology (at least for
the moment), and as the years stack up, mobile payments will likely gain a
great deal of traction, and eCommerce payments will become even more popular than they are now.
Do you
wonder why that is, though? It’s not that
people embrace whatever new thing is thrust in front of them—just look at New Coke or minidiscs. Something else is drawing people to these new
technologies. I think it’s pretty
intuitive, actually.
eCommerce and mobile payments are EASY
I can’t
prove this, but I would wager that both e- and m-payments were conceived of
with the intent to make life easier, both for consumers and the shop owners who
cater to them.
Of course, keying
in credit card numbers over the phone has always been possible, and, with the
advent of the online payment gateway, embedding that technology in a company’s
website so consumers could purchase products directly from the site probably
wasn’t much of a stretch—in hindsight, of course. The idea is instead of looking on a company’s
website and calling that company to order a product, you can now save a step
and simply click, type a few things, and…you’re done. And, you don’t have to call, wait for a human
to pick up the phone, and deal with bad phone connections—none of that. (The same goes for third party mobile wallets
like PayPal.)
Likewise,
pulling out a credit card and swiping has always been possible, but, having
everything stored on a smart device makes for a world of new possibilities,
like the “smart” choosing of the most beneficial rewards program for a
particular purchase, and, not having to worry about losing credit cards because
they’re all stored on your phone. Furthermore,
the possibility of integrating digital wallets with other smart apps (and hell,
just being able to access everything on the same device!) has the potential to
make life easier in ways we haven’t even considered yet.
Bottom line:
e- and m-payments make life quite a bit easier.
eCommerce and mobile payments are substantially
more secure than you might think
I can’t prove this either, but I would wager that both e-
and m-payments wouldn’t be anywhere near as successful as they are (even with
mobile wallets in such a nascent stage) if their extra security features weren’t
working very effectively. I’m talking
about tokenization, of course.
Tokenization breaks credit card information into disconnected
bunches of random numbers that can only be unscrambled with a special
formula. If a hacker ever breaks into a
server that utilizes tokenization, the credit card numbers he comes across
would be completely unusable.
Ironically, it’s the e- and m-payments’ perceived lack of security that prevents them from advancing even
more quickly—at least in today’s age.
Tokenization makes credit card data virtually indecipherable to
wrongdoers, but older generations who are used to things done a certain way
might not choose to believe it. (And, I’m
not bagging on older or more stubborn folks here. Point in case: I refuse to buy one of those
newer TVs with the higher frame (refresh) rates because I’m not used to how the
picture looks, and I don’t particularly like it! I don’t give a damn if the quality’s
better. It just doesn’t seem like a TV
anymore with that kind of picture. And,
by the way, I just learned you can turn that feature on and off. Still don’t trust it…yet.) I don’t doubt at all that as new generations are
indoctrinated into the e- and m-payments mentality, they will embrace it
easily, without a second thought—unlike folks who have experienced something
different in their lives.
The net effect of these new technologies
We’re living in some pretty pivotal times right now, and,
barring the world ending unexpectedly, these payment technologies will soon
become the norm—or, even more the norm than they are now. PayPal, which is already the standard on so
many websites, will be even more prevalent, as well as other, similar services
like Amazon Payments. And, as more
companies begin to utilize tokenization—on its own or as a byproduct of
adopting Apple Pay or something similar for in-store purchases—transactions will
get even easier for consumers to perform on their own, without the help of a
salesperson. And, they’ll be safer than
ever before. So, essentially, everything
is going to be easier and safer. That's how technology tends to work. Eventually.
I know this is a bit of a departure from my normal doom and gloom stance on most aspects of credit card processing, but developers really
nailed these e- and m- ideas. The
potential for safer transactions for all merchants
is simply enormous, as is the potential for integrating payments into other
apps and aspects of life with digital wallets.
This is truly an exciting time…and, I’m really curious to see what
happens next on the payments front.
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