Digital transactions were forever changed with the introduction of patent number 5590038 in 1994. As many remember, credit cards had to be hand validated, and rubbed for an impression. Cash, as it has remained the major key to transactions for the better part of three millennia, suddenly was in danger of being overtaken as the preferred method of payment. Digital verification processes streamlined the credit card transaction experience, and forever changed the merchant-buyer interface. Once again, new wireless-based technology is hoping to change the way we interact when we exchange money.
Two of every three adults owns a smart phone now, which is up from one of every three in 2011. The majority are going to younger demographics as a main source of internet access, nearly 90% of 18-29 year-olds own a smartphone. iPhones now dominate the domestic phone market, with over 90 million units in use currently in America. Chances are if you haven’t yet upgraded from your iPhone 4, you probably will find yourself shopping for one of the new models soon.
NFC, or Near Field Communication, is a variation of RFID radio transmission. NFC uses only the higher frequency waves, and is designed for secure, peer-to-peer transactions, specifically for things like banking information. The newest generation of iPhone 6/6 Plus, have NFC technology built in, allowing wireless NFC communication between a customer and a vendor. Apple Pay is Apple’s own version trying to simplify the interaction during a transaction just as wireless credit card processing did 20 years ago.
People love simplicity. They love when things work immediately, when things are at their fingertips, and when they don’t have to wait. Banking has become astonishingly common in the United States. Of the 200 million who own smartphones, a little more than half have used their phone for mobile banking. Mobile check depositing by photograph, funds transferring and monitoring, instant customer access; it really is all about having something as close to you as possible.
Of the roughly 38 million Americans with an iPhone 6 or newer, initially about only 9% tried the Apple Pay services. A year later saw that number grow slightly to 17%. Many analysts project a slow start to these kinds of services, but are expecting a parabolic increase as we grow more and more attached to our phones.