March 24, 2016

Will technology push consumers into the future?

Baiba Niparte

Offering Manager, Cards, Tieto

At the end of 2015, I received a letter from Mauritius. One of the stamps commemorated the 25th’ anniversary of the introduction of mobile phones to this tiny island nation. In less than a lifetime technologies have advanced to a totally different level.

What can we expect in 2016?

Technology experts promise us mobile payments and somehow higher security by using tokens for transactions. Eventually, we will use virtual currency because physical currency will be nonexistent, which is consistent with trends in Denmark and Sweden.

Gone are the days when people crossed dangerous wilderness in horse drawn carriages, bringing bars of gold from one town to another. No longer do people walk into banks with big suitcases in order to store their money in huge vaults. We do not send our letters via pigeon anymore. Instead, we use much more advanced technologies, and the role of real pens is limited to adding signatures to paper documents.

As information progressively increases and is exchanged more and more worldwide, it has become clear that eventually our main tool in all kinds of operations will be a virtual tool—specifically, data. Already, people are crazy about technologies that help them monitor their heart rate, steps throughout the day, or even their sleep each night. And that’s just the tip of the iceberg—we want to know everything, everywhere and all the time. Therefore, we want those gadgets to be comfortable when usedwearables are the next step in our move away from typical devices such as smartphones or tablets.

We now live in an era in which IT has developed so far that disruptive technologies are taking over and transforming our lives, businesses and even the global economy. Payments via mobile channels and e-commerce payments via the internet are already quite normal for much of the population. It’s easy, fast, convenient and modern. Everything can be done with just one tap. And that’s just the start. For example, have you noticed that biometrics are no longer merely the subject of futuristic fantasy movies? The question is: Will these technologies begin to enter our lives in 2016?

However, for a majority of people, contactless payments still seem like something from outer-space, but this is normal everyday life in Sweden today. Industry experts believe this will  become widespread eventually, but is society ready for this dramatic change? Yes, we use mobile phones and other devices through our daily routine, but will everyone be comfortable using money that cannot actually be touched?

Amazing changes in human behaviour are easy for the youngest, most progressive generation. They accept new things, because they grew up with many of those new technologies. Indeed, even small children have mastered sophisticated gadgets that didn’t even exist just few years ago. In contrast, look at the aging population of Western Europetheir prefered payment method is still cash!

However, this is most likely an issue for banks, processing centres and other new market players such as retail payment providers. Specifically, they must determine how to approach customers in order to convince them that the virtual digital debit card in a mobile phone is equivalent to a gold bar hidden deep within the huge vault of a bank.

Can innovative, modern technologies overwhelm the cultural values securely rooted in centuries of modern history? Will some of us be fully converted to mobile payments in 2016? Are we ready to have electronic chips that encode all of our vital financial information stored under our skin?

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