STATE OF AMERICA
Living In A Cash-Less Society –
Forgot quarters for the parking meter? No worries, a growing number of cities allow people to pay with their smartphones. Don’t have cash to pay the babysitter? There’s an app for that. Even street vendors now have credit card readers. A cashless future is more real than many suspect. As adoption of smartphones explodes, people have grown increasingly comfortable using their phones to purchase products, transfer money and engage in other types of financial transactions. Convenience is arguably the biggest benefit to consumers when it comes to going cashless. No longer do they need to seek out a bank branch or ATM before going shopping. There’s also the fact that people are becoming accustomed to seamless experiences in all aspects of their lives so they expect it at the checkout counter as well. And as anyone who has ever received money as a gift will tell you, there’s nothing more impersonal than cash.
BRAVE NEW CONSUMER
Co-Sharing: The Social Transaction – Today, a growing number of people are trading items and favors between each other. Digital technology allows anyone to find an object or service they need – when they want it, where they want it. Rather than finding these products and services at retailers or from large corporations, these items are often found in the hands of neighbors or like minds a great distance away. While some folks do receive financial compensation for these exchanges, there is a growing number of people that have a desire to exchange social capital more so than money. This social capital comes in the form of feeling good about helping out someone in their extended social circle with the added bonus of increasing the likelihood of that person paying it forward in the future.
Square’s Shaking Up The Payments Industry – When Jack Dorsey, creator of Twitter, set out to build Square, he hoped to help small businesses accept credit cards. He didn’t realize he’d turn the industry upside down. Square started off as a credit card reader that pops into the headphone jack of any iPhone, Android and tablet. Together with an app, it allows anyone to swipe a credit card. With this device and app, Dorsey wasn’t interested in simply providing a direct replacement for existing point-of-sale systems. He wanted to revamp the entire payments experience – making it simpler and more delightful. In the latest evolution of Square, payments have become even easier: customers don’t have to pull out credit cards (or cash) anymore and vendors don’t have to swipe anything. But now both sides are also getting insights and experiences they never had before. Square is providing an analytics system to vendors so they can track buying patterns and use the information to make adjustments that benefit their businesses. As for customers, the Square digital “card cases” they carry on their phones allow them to track their entire history with the businesses they frequent. Having a list of everything that a person has ever bought from that particular vendor forges a stronger emotional connection between consumers and their favorite stores. Square has re-imagined what a payments system would look like in a mobile, connected, iPhone/iPad world. Because of all this Square just might upend the entire payments industry whether it meant to or not.
Be Your Own Bank With Blockchain- With the new Blockchain wallet for Apple’s iPhone, iPad and iPod Touch, anyone can emulate the functionality of a bank. Simply download the the free app and have a fully-functioning online wallet that allows value transfer without the need for a bank or other financial intermediary. The reason users can completely bypass financial institutions is the use of bitcoins. Bitcoins is a new currency for the online universe. They aren’t tied to any government or country and only exist on computers in a peer-to-peer system run by the people who use it. And because of this, Apple with mountains of existing iTunes customer accounts could find itself in the best position to capitalize on a robust cash-like ecosystem that completely bypasses the banks via apps.
ON THE RADAR
Follow This: The U.S. Treasury Department recently launched the MyMoneyAppUp Challenge which is a contest intended to motivate American entrepreneurs, software developers and the public to propose ideas and designs for next-generation mobile financial tools. This contest was inspired by people in developing countries who use mobile phones to make monetary transactions in areas that lack even a single bank presence. Do you have an app idea that can help build a more secure financial future? You can follow the challenge here and see some of the creative ideas that have already been pitched.
Try This: FavorTree puts a twist on the idea of paying it forward and instead encourages people to “play it forward.” The startup is positioning itself as a mobile favor-trading game. Its mission is to encourage and reward people for borrowing and lending goods that they already own or for offering to help when someone needs a favor. For example, users can borrow a book, lend a video game or help a neighbor plant a garden. By helping their community with small favors, players earn rewards that can be traded in for when they need help with a future task.
Know This: Bartering is on the rise. Due to the economy, the hospitality industry is looking to tap into alternatives to monetary transactions so crash-strapped consumers can enjoy time away from home without breaking the bank. The Italian Bed and Breakfast Association already holds an annual Barter Week where customers can provide services in exchange for accommodations. In Sweden, Clarion Hotel recently announced Room For Art – a simple idea that allows visiting artists to pay for their room by giving a signed piece of their artwork to the hotel.