Development of Electronic Payment Methods

Saturday, September 8, 2012

With the advent of new technologies there are many different ways of paying for things nowadays.  Whether it be by using your smart phone or swiping a card, the ease of paying just got easier.   For those that like internet banking, we thought that we hit the jack pot when that arrived!  Now we can do much more than just use the internet!

Here are some of the best known and/or interesting ones:

  • Soon after internet banking came cell phone banking, which allowed the same actions as internet banking.  However, now through specialized applications (apps) it is much more convenient.

  • The latest development is the smart phone card reader, which has spurred on many retailers to develop compatible payment methods for their customers. The process is simple. The retailer issues cards to their customers, the customers load the cards on their mobile devices and, when they want to pay, the retailer uses its smart phone card reader to read the details of the card off the customer's mobile. Consumers no longer have to walk around with dozens of loyalty cards for all their favorite outlets; one mobile device stores them all.

    • One example is Starbucks, who launched its mobile application in November 2011. Customers should start by downloading it onto their phones. The application then allows them to load money from their credit cards onto their Starbucks cards and pay for Starbucks purchases. This means that customers can pay at Starbucks without having to reveal their credit card details. You can also protect the Starbucks app with a password, so in the unlikely event that your phone falls into another’s hands, then you can then be rest assured it’s password protected.

  • Between 10% and 15% of Canadian retailers are already able and willing to process electronic payments, which places the country at the forefront of the technology. Unlike Starbucks, they have not created their own smart phone applications or cards, but they can process payments made through apps that use cards by Google, PayPal, Visa and MasterCard.

  • The apps from MasterCard and Visa let you register your existing credit cards on your device. The retailers then scan your device as they would usually scan your plastic cards, and the transaction is done. Finally we’ll be able to leave all those plastic cards at home.

  • The Google and PayPal apps register your credit card details for you. The number that the merchant scans from your smart phone is the Google and PayPal account information that links to your stored credit card. This again means that the merchant does not see your credit card details.

  • Even airports now allow check in to be sent to your mobile device and the airport scanners pick up a bar code on the phone.  No more paper airline tickets!

Since banks, credit card companies and telecoms seem to agree that there are benefits in the use of such technology, we may soon be able to carry our phone for our transit passes and library cards too.