Technological Food for Financial Thought

“A look at how safe your smartphone is when it comes to managing your financial details.”

Emerging technologies are transforming the way we conduct our everyday lives. One only has to think back 30 years before the advent of the credit card to wonder how we ever managed! But the latest smartphones are taking the revolution even further. In addition to a wide range of applications and increasingly flexible connectivity options is the emergence of the contactless payment system.

Already a range of telecoms providers have teamed with financial partners to develop contactless payment systems. That means payments can be made at retailers without using either cash or a credit card.

But how safe are these new technologies? Most techies agree that the new systems using smartphones are more sophisticated than credit cards, meaning that they could be far more secure. There is no magnetic strip to be swiped and the added processing power of the phone itself creates stronger encryption capabilities than a regular chip and pin credit card.

One of the latest giants to enter the scene is Google, having recently teamed with Citigroup and Mastercard to develop a Mobile Wallet concept for the Android operating platform smartphones.

With their marketing power and the financial muscle and coverage offered by its partners, the push for consumers to adopt its Near Field Communication (NFC) technology is well and truly on.

There is no doubt about the convenience that such an application would bring to consumers. The ability to pay without having to carry either cash or cards reduces the size of the handbag or suit pocket and it means all financial transactions can be handled one way.

But concerns do still bug the successful marketing of NFC technology. Amongst these are consumers' worries about connectivity with the internet at locations where they want to pay and the size of the screen and keyboards on most smartphones. Further concerns raised by consumers include the slow rate of interaction at retailer's tills and the nagging issue of just how secure the transaction can be.

A recent survey amongst potential users identified that at least half would like the option of using PayPal and 2 in 5 want reassurance that the smartphone would not retain sensitive credit card information.

However, whilst the technology juggernaut rumbles on, some still prefer good old fashioned cash. For them the options may eventually mean having to apply for a loan and having bigger pockets in their trousers.

Japan, Turkey and the UK all have trials of well developed contactless payment systems in place. The US has adopted the latest trends and is working hard to grow the existing 3.5 million existing users.

As with all new technologies, it will take time for the word to spread and the bugs to be ironed out. The younger generation users tend to be amongst the early adopters, as their inherent trust and adeptness with new ideas makes them inquisitive and more easily susceptible to peer pressure.

So payment for goods and services in the future could be just a simple click away, whilst now it takes retailers valuable time, paper and manpower on tills to collect cash. They will be pushing hard for this cost saving and convenient technology to become industry standard.

Technological Food for Financial Thought Technological Food for Financial Thought Reviewed by Sandipan Chakraborty on June 29, 2011 Rating: 5
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