The world is changing rapidly, and the world of finance is no different. Experts like Scott Tominaga and others have some bold predictions for what the future holds for finance and how we handle our money. Here are some of those predictions:
The Rise of Mobile Wallets
With NFC (Near Field Communications) and other technologies like it, it is becoming easier and more convenient for consumers to pay with their phones. Mobile wallets will be a big hit in Japan; we can see this already with the rise of the Suica system in Japan’s major cities. The NFC mobile phone platform has been used as a transit payment system in Japan since 2004 and is now used for close to half of all transactions.
Mobile wallets are becoming more popular in the US as well. Google Wallet has recently partnered with MasterCard on a new mobile payment program, so it wouldn’t be surprising to see NFC-enabled phones being adopted by major carriers like Verizon, AT&T, T-Mobile, etc. The convenience of mobile payments will drive consumer demand for NFC-equipped devices.
Bringing Money into the Digital Age
Although mobile payment systems are convenient, there are some problems that have not been solved yet. For example, what happens when I lose my phone? Since the phone is tied to your bank account or credit card, you will still need to go through the process of recovering your account. This problem will not be solved unless you move money out of your physical wallet and into the “cloud.”
Cash is one of those products that has stayed almost the same throughout its history, but even cash is starting to change. If you’ve ever used Square, you know how easy it can be for a small business or individual to accept credit cards with an app on their phone. Increased mobile payments should lead to more mobile card readers like this one because they are simple to use and inexpensive.
Another issue that arises from cash becoming digitalized is counterfeiting. Countries where counterfeiting occurs, would benefit greatly by transitioning towards a digital medium for currency transactions. Countries like Japan and the US have advanced significantly in this area. In fact, the US has recently upgraded its currency to prevent counterfeiting, but there is always more that can be done.
Widespread Job Losses
Many jobs will be lost as technology continues to advance across all industries. This trend may not happen right away, but advancements in robotics are leading to decreased demand for certain skill sets that were previously necessary for these jobs. For example, taxi drivers may not need to know how to drive manually because self-driving cars are much safer. Taxi companies could also benefit from mobile payment systems like Square if they want customers who prefer paying digitally. It’s unlikely that many taxi drivers would use a mobile wallet because it takes too long to load, but the demand for those willing to accept payment by credit card should increase as self-driving taxis hit the road.
Final Thoughts on the Future of Finance
Looking at all these changes, it’s hard to predict what finance will look like in a few years. We may still be paying with cash and cards, or maybe we’ll have a digital wallet on our phones that is used for 90% of all transactions. In any case, cash will most likely be a lot less popular as more and more people adopt the new technology.