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A Payment Revolution
March 22, 2010 | Neal | 1 commentIn recent years with the proliferation of credit/debit card readers in retail outlets, there are fewer and fewer occasions where bringing cash or a check is necessary. That trend aside, there are still plenty of times when you still might need to bring cash with you somewhere. A few that come to mind immediately are fundraisers, places you want to tip in cash (bars, restaurants, and other such service providers), and temporary retail establishments like farmers markets, crafts festivals, or open air markets. Well, convenience appears to be coming to those instances as well as person-to-person transactions like registration fees, fantasy sports drafts, and the like. In Square, there is a device that has the potential to take the convenience of electronic payments to the next level. If these devices become pervasive then we can quickly arrive at a time in our society where carrying actual cash becomes completely outmoded. The best analogy I can give you is that it can be a device-driven equivalent of PayPal that wouldn’t require every payer to carry around a secure device to make payments while requiring them to type in all of the data associated with the specific payment they’re making.
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Five Things to Take Away
- Fund-raising – a great way for politicians and those with causes to make the rounds both at formal events and on the street and eliminate the “I don’t have a form of payment with me” excuse;
- Temporary Retail – I know my wife and I have had situations where we stumbled upon a farmers market or roadside fruit stand and passed it by despite wanting to purchase because we didn’t have cash on hand, the Square device would be a great solution for this situation as well;
- Informal Event Organizers – there was a time in my life when I ran 3 or 4 amateur sports teams per season that each had 8 to 20 people participating (and splitting any team fees) – it inevitably took half the season to get to the point where everyone had remembered to bring their check to reimburse me for my upfront cash outlay, a device like this would have been a huge help;
- Security Risk?- The device claims security based on visual recognition but that assumes that the vendor is honest. It isn’t hard to imagine someone with a device like this pickpocketing someone, quickly making a charge, and then putting the card back so that the victim doesn’t think to check their charges until well after the charge has gone through. The fraud would likely be detected within the month and the device could be disabled but as we see with Medicare fraud, criminals are good at understanding the lags that occur before fraud is detected and how to extract maximum benefit in each instance before folding it up and then creating a new one.
- Unintended Downside: The Homeless – Many homeless people subsist on change given them by passers-by. As there become fewer and fewer reasons to carry cash of any sort, there is the real possibility that this source of subsistence will dry up putting more burden on institutions (public and private). Obviously, this isn’t an intentional outcome but something that will need to be considered as aid organizations chart out their near-term futures.
Tags: Digital, electronic payment, iPhone, PayPal, retail, Square, Start-up
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[...] This post was mentioned on Twitter by Patrick Jones, blackturtle. blackturtle said: Who Needs Cash when you have Plastic! A Payment Revolution | Black Turtle Media http://ow.ly/1qwL7 [...]