THE BLOG
09/10/2013 05:47 pm ET Updated Nov 10, 2013

Money in Your Pocket: Mobile Taking the Friction Out of Payments

Facebook's impending announcement of the release of a mobile payments platform based on Facebook log-ins and real currency-- rather than private in-game bling bucks-- is a harbinger of a new, dramatic era of digital money. Arguments about whether the social network giant will be successful aside, the mobile payment market is growing exponentially.

It isn't that Facebook's move is entirely novel. The fact that your smart phone is a form of electronic payment is widespread today and looking to tap into the $7 trillion of transactions traditional credit card companies are making each year. We have apps like Venmo, that translates social connections into direct payments among friends; Stripe, which provides credit card transaction clearing for mobile devices; and Payleven, which makes the chip-and-Pin payments common now in Europe available for individuals to pay each other via their phones. Plus, mobile payment platforms like Google Wallet and Square are becoming commonplace; increasingly credit and debit cards are becoming extensions of the worldwide network. We even have Bitcoin, the latest and most intriguing pure net currency yet devised. Whether Bitcoin succeeds or not, it definitely shows the way toward low friction, high-velocity pure digital currencies of the future..

In fact, way back in 2011, Michael Saylor, CEO of analytics company MicroStrategy, predicted this new era in a talk at the Pivot Conference. There was Michael, waving his phone saying "this isn't a phone, it is money," and then relaying a set of situations where the phone could stand in for money. One of those was using your phone to directly check-in to hotels. The phone has the smarts to do it, Saylor said, knows where you are, and can use any number of approaches to actually unlock your hotel room.

Just last month, that scenario became real. Whitbread, the UK's largest hotel chain announced it will be opening a new line where the entire experience can be managed from an app: check-in, room service, temperature. Guests can even stream content directly from their phones onto the huge in-room TVs. Packaged as a "hub" as a more affordable option to keep costs lower and rooms more affordable for guests the new rooms also offer ultimate ease and personal control and that certain cool factor that will attract the more digitally savvy travelers.

While the Whitbred example is a rarity today. We don't think it will be for long. The difference between a curiosity and a movement is scale and Facebook brings that in spades.

What Facebook brings to mobile commerce that is transformational is its vast population of users and apps. With Facebook now moving its legions of users toward deeper use of mobile currency, today's interesting, but isolated projects are likely to merge into a swelling tide of change. We see the situation as much like the early impact Facebook's hordes had on online gaming. Those hundreds of millions of birthday-wishers can push an emerging new mode of interaction past the tipping point.

With Facebook's serious movement into mobile payments space, we see 2014 as the year when people across the world begin looking at their phones and seeing not just messages and music, but money.

This post is part of a series produced by The Huffington Post and the Pivot Conference. This event (held in New York on October 15-16, 2013), brings together more than 400 Social Business Leaders from major companies at the forefront of change. For more information about Pivot, click here.