Industry Updates

Retail Payment Systems - Are You Ready?

Written by Cameron Laird
Published on Saturday, 18 February 2012

nfcYou're already on top of how your business works now; what you need is to know ahead of time how it will work in coming years. For that, study payment systems.

That's hard advice for me to give, in that I'm constitutionally more comfortable with hard engineering data and well-referenced research. In the case of payment systems, I have no certainty about who'll win and lose, no definite calculation that demonstrates NFC will crush Dwolla (or vice-versa), and I'm not even sure which continent will come up with the winning payment system for ecommerce or even for traditional retailers of the next decade. I'm sure, though, that payment five years from now will look far different from what it is now, that payment will be a crucial part of business success, and that payment has the potential for enormous leverage in solving retailers' problems all the way from Marketing to Compliance.

What you need to know
You might think in terms "will that be cash, check, or charge?" Those alternatives will still be available in five years, but the new revenues that will come to retailers over that time probably won't come through any of them, at least not as we recognize them today. Networked, digitized communications will increasingly mediate even the most mundane transactions, like buying a cup of coffee, and none of cash, check, and charge really make the most of the Internet. Instead, you'll sell that future cup of coffee through a mechanism that boasts better security, less frictional loss, and more benefits for both buyer and seller than traditional systems.

All the technical pieces of future payment systems are already well established:

  • we can embed surprising amounts of memory and computing capability in a package small enough to fit in your hand;
  • that piece of hardware can communicate wirelessly, securely, and reliably;
  • we have an extensive collection of best practices to minimize crime; and
  • the data arising from digitized payments flow naturally to Business Intelligence executives.

What's left? Just the details of how exactly the pieces will fit together, and whose brand will appear on the combination.

To keep up with the potential of payment systems, you'll want to know how African economies are jumping a century forward in a single leap through their use of cellular handsets, what your developers like and don't like about Amazon's Flexible Payment Systems programming interface, and why visitors to the London Olympics might carry none of cash, check, or charge during their entire trips.

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