Will the smartphone do for retailing what it did for photography?
Like a recession, we never quite see a tipping point when it happens. Tech seems to alter behavior in unpredictable ways. But, in fact, tech makes it possible to form the habits we unknowingly crave. We love TV, but we’re walking away from the TV set. We still make calls at home, but have abandoned land lines. You used to carry a point-and-shoot camera, and you still do — but now it’s in your smartphone.
Google’s full-throttled entry into the mobile payments space last week removed any doubt that this is the make-or-break year for the digital wallet. Google is backing a technology called Near Field Communication (NFC), which will require a new chip in smartphones. This tech has been around for a while, deployed in payment dongles and proximity credit cards, but there now seems to be critical mass for handset makers to include it in the next generation of phones. Google’s Android mobile phone software powers about 1/3 of the world’s smartphones, and it’s growing fast. Another quarter comes form Apple, which has been mum on NFC but is expected to get on board. (Apple controls both the hardware and software for the iPhone.)
The reason the credit card hasn’t changed one bit since Diner’s Club invented it 60 years ago (from the consumer’s perspective) is because it hasn’t had to. It does exactly what we want, with minimal friction.
But there is room for improvement. We are prodded to carry many cards, not only to pay on credit but to take advantage of those omnipresent loyalty programs that reward us on a store-by-store basis, cluttering our wallets. Plastic is inherently insecure, because it carries all the information hackers need to clone it.
And, most of all, the card itself had become nothing more than a delivery system for e-data — only people of a certain age, or customers of some quaint car services, know that the raised numbers on a charge “plate” are there to make an indentation on triplicate, carbon-copy credit slips using a mechanical machine with a roller.