Money, like all other inventions of humanity, has evolved a great deal in the last millennia. From gems and coins, it evolved to paper, then plastic, then ones and zeroes that you can virtually mine using a computer that completes calculations non-stop – this last one might not last, as many people consider it “money from nothing”, but this is not what we want to discuss today. Instead, let us take a speculative look into the future of payments and money as a whole.
Even today, payments are predominantly electronic. There are people who don’t use any cash anymore – all their payments are handled through plastic, smartphone payment services, and bank transfers. And the banks are continuously encouraging the phasing out of cash – on one hand, because plastic and its modern-day counterparts are considered to be safer, on the other, because of the money they make by providing payment services to their customers. Today’s teens will become the dominant demographic soon – those born into the Generation Z will make up as much as 40% of US consumers by the year 2020 – so the usage of smartphones as payment devices will grow, and the usage of cash and plastic will gradually decrease. Using cash will be a burden for them rather than a choice.
Bitcoin and its likes will likely become a much more widely used payment method in the future. Cryptocurrencies will not completely replace fiat currencies any time soon but they will gradually become a preferred means of payment for merchants and their customers alike. After all, they offer a way to pay fast – transactions settle sometimes within minutes – and with low transaction fees. Of course, they still have a lot of challenges to overcome (not to mention their bad reputation), but they have a clear chance to become as widespread as traditional money is today.
Last but not least, let us take a look at the way we will authenticate our payments in the future. Today, card users have to introduce a PIN to confirm that they are, indeed, the ones who pay – or not even that, if they use contactless payment methods, up to a certain amount. But even a PIN can be stolen. To increase the security of payments, biometric authentication is a proposed solution. Even today, smartphone payment systems like Apple Pay and Google Pay often use fingerprint authentication – and in the future, the range of methods created to make sure you are you will likely be expanded with options like iris recognition, vein mapping, heartbeat analysis, and such.
Whichever of these predictions come true, we can be sure that we will be able to pay in a more secure and far more convenient way.