A final word on the Future of Money

It’s reflexive: buy something; shove your hand into your pocket or purse.

Today, even if you’re paying with your smartphone rather than cash or a piece of plastic, there’s a physical action involved. Or a series of actions — swipe the card, then punch in your PIN or scrawl your signature.

In the future as some envision it, those actions will simply melt away.

It’s already happening.

It’s the way you pay the Uber driver who arrives at your doorstep because you asked him to through a smartphone app, or the delivery man who brings you food you ordered on Grubhub.

The money moves automatically; it’s not part of your interaction with the car’s owner or the chinese food restaurant.

“With Uber you actually never pay,” Aite Group analyst Thad Peterson, told me on a Google Hangout the other day. “All the information has already been stored by Uber. The transaction is taken care of. After you arrive at your destination, you never sign anything.

“The receipt shows up electronically. The driver gets their money electronically. The payment transaction simply vanishes into the background.”

He thinks that’s what the future will look like. So do I.

And why not?

Those kinds of payments — more dependent on tokens than payment card information that could be reused by thieves without your permission — are safer and easier.

You never have to pull out your wallet. You receive digital records of transactions rather than having to keep track of paper receipts. (A lot of merchants are moving toward emailing you a receipt rather than handing you a print-out, right?)

Today, all this takes place via the computers in our back pockets. But that could morph into wearable technology, perhaps mini CPUs plugged into our clothing.

A lot of the work is already being done by startups. But the regulatory hurdles those innovators face today is high.

There are, among other things, money transmitter licenses that new players must obtain in 47 states and the District of Columbia before they can legally move our cash. Still, there are forward-looking payments processors that handle the movement of cash for innovators who don’t want to mess with getting licensed.

Another up-and-coming technology is beacons, low-cost pieces of hardware that take advantage of the bluetooth signals our devices use. They’ll allow us to passively pay in brick-and-mortar stores – say, in a restaurant. (To see what that looks like, check out this video.)

Companies planning to offer these devices include giants such as PayPal and Qualcomm, as well as smaller outfits. All are paving the way for what we will likely someday view as the norm.

I encourage you to read our series on The Future of Money. And I’d really love to chat with you about it (@SeanSposito).

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