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Dollars to Digits: What is The Future of Money?

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The explosion of online shopping has forced an evolution in how business is run -- cash has quickly been trumped by debit and credit card transactions at brick-and-mortar retail stores and restaurants. So the question becomes: What will be the future of payments? Consumers' digital identities are transcending media boundaries and entering the real world. We predict that in the next few years it won't be about cash or credit, but rather PayPal, tweets or something new altogether.

Today, integrated iPad POS and mobile technologies are able to bring people's online wallets -- services like PayPal and Google Wallet -- into the physical world, forever altering the retail landscape. Consumers have more options at savvy establishments, from cash to cards, to the existing balances in their online PayPal account -- and retailers around the world rejoiced. The key in this shift has been that point-of-sale systems are now digital and connected to the cloud. When monies are represented by computer bits, payment options become more flexible. Whether it's bitcoin, reward cards, Facebook credits or even your social reputation, many vendors are open to accepting multiple forms of payment, and the technology is in place to make it happen.

From the consumer perspective, the rise of the mobile wallet is gaining momentum -- it's always available and readily connected to a line of credit. eMarketer notes that mobile payments will hit $1 Billion this year, and will steadily increase to $50 Billion by 2017. And while the popularity of mobile payments is slowly growing, mobile loyalty apps have reached a tipping point. We can only assume that mobile payments are next. According to Cardstar, every 8 seconds a physical loyalty card is converted to a mobile device. These trends echo the mobile payment trends that we are seeing in the EU and in many of the Asia-Pacific regions.

Social media and advertising have also had a significant influence on how brick and mortar shops utilize payments in order to gain media attention. The concept of digital influencers has allowed for many brands to set up popup shops that have allowed businesses to accept tweets or check-ins from fans in exchange for hard goods. Examples include Amex's Pay By Tweet campaign, which allows American Express "customers who have synced their Amex account information with Twitter to pay for certain products by tweeting purchase hashtags" and Kellogg's Pop-Up store, which lets you pay for snacks with a tweet.

We see these as only the beginning of vendors and brands examining how stores are exploring value and digital currencies. The above examples explore the grey area between perceived versus actual value, but things like discounts for Foursquare check-ins, or mobile couponing based on your proximity to a store, are user experiences that we have all seen.

Take a good, hard look at your wallet or pocketbook and you will find a collection of bulky cards, receipts and quickly jotted down notes. Perhaps your phone has a number of apps, or even an NFC chip that allows for transactions to be made on the quick. We are in the midst of watching web 2.0 innovation trickle down to vendors and consumers to change how we buy and pay for things. There are so many ways to pay, but only a few have started to emerge as front-runners in the race to surpass the cash register.

Many of the iPad-based POS ecosystems have started to pave the way to understand and enable these trends, but comprehensive integration between the mobile wallet and store POS displays may take some time. This integration is not for everyone, but it represents the future of the new consumer. In the short term, merchants will have to figure out how to cater to their loyal, older base, and entertain new early adopters who are the future of their business. Only time will tell how the transition to payments 2.0 will unfold. After all, time is money.

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