For those of you not familiar with the term "near field communication," or NFC, it's become a bit of a buzz in the technology industry. NFC technology in mobile phones can allow a customer to simply enter a personal identification number (PIN), choose their bank account they want to access and then simply press a button to purchase an item online. But are we ready to turn in our actual wallets, give up our cold hard cash currency and trust a totally online currency system?
An argument can be made for both sides of this question. And some companies, like Visa, are putting the technology to the test. Most likely, the first group of consumers to try this technology are online gamers. Online gaming will be the testing ground for Visa to see if the general society and businesses' e-commerce are ready for such technology.
ProsOne of the greatest assets a digital wallet provides is quick and easy purchases of items, for online gamers especially, as new games come out as often as gamers buy them. If the system works as it should, a consumer's financial history can be stored in one spot, as well as other information, such as medical data, a traveler's frequent flier points and appliance warranties. There would be no more need for continuously filling out the usual billing information or personal background one usually goes through for an online purchase.
For shoppers at physical shopping locations, it would be just as easy. With NFC-enabled smartphones or other mobile devices they're carrying, all the consumer has to do is connect to the check-out counter's device, wave their smartphone right by it, like you would with a e-card for bridge toll, and you're purchase is complete. Long lines during Black Friday may never ever exist again. The thought of having to handle less cash may be a warming thought for consumers, too. They'll no longer have to worry about losing their money or being pick-pocketed or, even worse, mugged for their cash. All of their finances would be locked and secured in their mobile devices.
Another positive point about this technology is that major tech companies are already pushing for the technology and it may be widely adopted quicker than people think. Mega-tech businesses like Google are already on board to get digital wallet technology going, having teamed up with Citibank, First Data, MasterCard and mobile phone companies like Samsung, Sprint and VeriFone.
With security features today, and with a smartphone user's option to add more security via online systems like LifeLock, consumers may come around quickly to this technology if they are reassured that their identity is safe.
ConsIt is true that if consumers can trust their digital wallet security, they may warm up to it quicker. But as much as consumers use their mobile devices and purchase items online, they are still heavily embedded in the physical currency system. Digital wallets can promise to make it easier and safer to purchase items online, but consumers may not rush to the idea. Awareness of such technology still has a ways to go and many consumers may become confused as to how it all works. Still others may be staunch in their ways and may not want to conform to totally digital financing.
It's one thing to convince consumers on digital wallet technology, but it will be another hurdle to convince businesses and stores. They'll be the ones to have to invest in new equipment to allow the technology to work with multiple mobile devices. Businesses are converting to e-commerce for shoppers like online gamers, but just how daunting will it be to convert to the technology at its physical stores? According to Newtek, 82 percent of small businesses don't have the necessary equipment for digital wallet technology to work. How expensive will it be to get that equipment and how reliable will it be? Businesses may not want to invest in what is a risky business at the moment, only because no one knows just how smoothly it would go over.