The Future of Paper Currency –

Technology is quickly changing the world when people can go to school online at American Intercontinental University, Baker College, Colorado State University, George Washington University, amongst many others, and lots of other things are changing quickly too. Today’s paper banknotes and wallets full of plastic are just another stage in the rapidly evolving cycle of money. Cattle, cowrie shells and leather have all been the material of choice for payment at one point in the long history of money. With recent advances in technology any material at all, looks like it is headed out the window.

The penny was just nixed from Canadian currency last year, and many want to see the same thing in the U.S. Electronic, cash-less exchanges are becoming more available, and these days it seems like a new mobile payment app hits the market every week.

There are several factors at play in this transition. As smartphones continue to grow the use of applications and access to wireless technology are changing the way we think of sharing information. This coupled with the ease of digital transactions makes for an interesting evolution  in the future of money.


How Digital Payment Works

New Field Technology (NFC) technology is at the core of nearly all mobile payment tools in the market today. Embedded in many mobile phones, an NFC chip allows any device capable of detecting the chip to share information or complete simple transactions.

Smart phones with NFC capability can also read information from tags or codes embedded in posters or stickers.

In order to read the NFC chip, both devices have to be in very close proximity. Many experts say this improves the security of the devices as a hacker would have to be so close to you that it would feel uncomfortable.

Some people use a NFC chip to share information. A NFC scanner at a store check-out can be used to complete a cash-less transaction. Many of today’s mobile payment applications rely on this technology to make their payments.


Companies Bet on a Cashless Future

Google Wallet is one payment application with a big reputation. With this app you can use any debit or credit card you’d like with just a quick swipe of your NFC-equipped phone. The transaction is completed instantly, and any Google offer or coupon for that merchant is automatically redeemed. Since it automatically syncs, your phone will never be without the most up-to-date information.

Unlike a traditional wallet, Google Wallet can be locked and disabled remotely in case it is stolen or lost. A nice option to avoid that harrowing moment you realize your wallet is missing.

The new Merchant Customer Exchange (MCX) is backed by a team of retail superpowers including Wal-Mart, Target, Best Buy and CVS in hopes they can oust Google and become the universal payment app. Though MCX is still under development, developers are racing to figure out the right formula to become every shoppers payment app. Joining forces with some of the biggest names in the business may be the right route.

Annual Sales among the 15 public retailers who have signed up to use MCX reach above a trillion dollars, according to Jeremy Mullman, a spokesman for MCX.

That is if Square Inc. doesn’t have something to say about it. One of the latest innovations from Twitter cofounder Jack Dorsey is after the same market, and is growing at an incredible clip, according to the Boston Globe.

The amount of money it processes through its payment system grew from $1 billion in 2011 to $8 billion this year. It has done some heavy marketing to retail outlets like food trucks and sellers at farmers markets who can get a free credit card reader for signing up.

With big names like Starbucks Coffee Co. signing up, Square has attracted a lot of investor growth and interest. For the small retailers, like a hairdresser or an artist, Square provides an option to accept credit cards without having to buy an expensive credit card system.

Boston start-up SCVNGR and its platform Level Up are also working in direct competition with Square.

“Square and Level Up, at the end of the day, are going after the same thing,” said Scvngr’s chief executive, Seth Priebatsch in an interview with the Boston Globe. “We suddenly have the ability through mobile devices to change the economics of moving money.”

In an effort to attract customers Level Up eliminated its swipe fees for card transactions in September. It is yet to be seen how fees will be used with these mobile apps as the market continues to develop.

Digital wallets are still in development, and most consumers still rely on a traditional cash and plastic monetary system. It will likely take years before the mobile payment options and electronic transfers take-over a deeply rooted cash system. As the cycle of money continues to evolve a cashless future is a real possibility.