What it is: Money is going digital and transferring money digitally through a mobile phone is the coming future.
Anyone remember the old days when most people paid in cash and credit cards were hard to get and not often accepted everywhere? Back in those days, you had to carry wads of cash around and store your money in a bank. That meant you could be easily robbed and if you didn’t get to a bank in time (long before ATMs existed), you didn’t have money that night.
Nowadays, money is going digital. Credit cards are just one way of eliminating the need for actual coins and paper money, and now Bitcoin and PayPal offer new ways to pay for products through the Internet. While many people in the so-called advanced countries still cling to credit cards, people in Kenya are actually more advanced, and their future shows the future of money in the rest of the world.
In Kenya, there’s a lack of infrastructure including banks. That meant people were stuck with cash that would be stolen and limited access to banks. What eliminated these problems was a company called M-Pesa, which allows people to store money digitally and make payments through their mobile phones. Best of all, people can not only pay for products through their mobile phones, but they can also pay each other. To read about the success of M-Pesa in Kenya to allow digital payments through mobile phones, click here.
While the Kenyans have been using mobile payments with mobile phones for years and the Japanese have used their mobile phones as credit cards for years, the rest of the world finally seems to be catching up. Apple introduced Apple Pay, which links a credit card to an iPhone or Apple Watch. Now you can just swipe your iPhone or Apple Watch near a payment terminal and securely pay for items without giving up your credit card number. This added security keeps your credit card number private so hackers can’t break into a merchants computer network and steal thousands of stored credit card numbers.
Now Apple may be planning to move into the mobile payment money transfer business as well, similar to Kenya’s M-Pesa. By not only making it easy to pay businesses but also individuals, Apple hopes to make Apple Pay even more attractive to people. Now you can easily send money digitally to your friends using your iPhone or Apple Watch. If you go out for dinner, one person can buy using Apple Pay while everyone else can give that person money digitally through Apple Pay as well.
This digital money transfer future means more people will use Apple Pay and avoid carrying wads of cash or even bother with the old fashion way of writing a check. Digital money transfer through Apple Pay will be just one more link to keeping people tied to the Apple ecosystem. After all, how can your receive money from your friends if you’re using an Android phone and they’re using an iPhone?
Coins and paper money are obsolete, but still useful for the anonymity they offer. For the most part, credit cards are also obsolete because you don’t need to carry a plastic card around in your wallet when you already carry a smartphone and maybe a wearable computer around as well. Money transfer is the future of Apple Pay and the future of the economy in general. As more people get used to paying with their smartphones and smart watches, expect Apple Pay to continue growing in popularity and watch as the idea of using cash, checks, or credit cards slowly fades over time. Digital money payments are the future. Just ask the Kenyans and the Japanese.