Where are digital payments going

Digital payments are a huge opportunity space right now.  Startups and established companies are not quite sure yet what consumers will accept and where the space will end up, but are willing to innovate in the space to get a piece of the pie early. 

Companies like Paypal believe the digital wallet is where consumers are going to go.  It will be the next movement from credit cards and ATMs.  But coverage across local, national and international systems will be key.  These systems will also have to figure out ways to develop loyalty and discount programs that consumers have become used to through their credit card companies. 

Bitcoin and Social payment is another huge potential area for digital payments.  The question for this system will be how much are consumers willing to mix social with financial.  This is well beyond the current system that social impacts financial decisions.  As younger generations grow up in a world of sharing, how much will that influence the acceptability of this mixing also. 

Other startups have joined in this business as well, recognizing how lucrative it can be.  Coin is a new startup looking to replace consumers heavy wallets with one simple card.  While there are already order for the product that has not yet been fully created, there are some obstacles the company needs to surmount.  1) Un-linking phone to the card.  While consumers are now dependent on their phones and carry it everywhere, they continue to be dependent on the battery life.  If wallets are linked to this battery as well, it could cause a major issue when the life drains out and the bill has not yet been paid.  2) Financial institutions must be on board, which likely needs finesse by the company.  Everyone wants a piece of the pie.  Credit card companies may not be as eager to join a venture such as this, and lose their connection and engagement with consumers every time they take/use a credit card from their wallets.  A question also remains - how much of a problem is having numerous credit cards in a wallet.  Do a large enough number of consumers care enough to change their habits for this type of new product.  While this issue may be a concern for many, other startups using other solutions than carrying another credit card could likely take over before this technology has the chance to gain legs.


http://money.cnn.com/2013/11/17/technology/innovation/coin-startup-credit-card/
http://www.zdnet.com/paypal-banking-on-the-digital-wallet-7000023342/