Dirty money has always had all sorts of nasty criminal connotations – but the term has taken on a whole new meaning in the past few months.
It’s hard not to love the feel of those notes but, let’s be honest, they’re a little bit grubby. You just don’t know where they’ve been.
The use of cash has been falling in many countries as consumers have increasingly opted to use cards and apps even for minor purchases. A report by Juniper Research earlier this year forecast that global contactless transaction values will reach nearly $6 trillion in 2024, up from $2 trillion in 2020.
Until recently the story has mainly been about convenience; now it’s as much about contamination. Safe distancing requirements and COVID-19 transmission concerns have made contactless payments the preferred option for an increasing number of vendors and consumers. Interestingly, the Juniper research report referenced above was released in early February even before the Coronavirus’s impact on consumer behavior could be factored in.
Over the past few years, Asia has been quick to adopt contactless transactions. Mobile payments options offered by WeChat Pay & AliPay have taken China by storm, making up nearly 90 percent of the local market.
Singapore has taken the step of dedicating a government task force to help its senior citizens and small businesses – think food stall holders – join the cashless revolution. And for the young digital native, even the traditional experience of great street food will probably be enhanced by the instant gratification of a swift check-out. Everything has to be done faster, simpler and, these days, cleaner.
So, combining the COVID-19 concerns about physical contact, the increasing demand for security and the exponential expectations for a better consumer experience, it is clear that the new normal for payments is going to be all about new technologies.
Here are three contactless payment technologies that we can expect to become an increasing part of our future – even when the pandemic is, hopefully, just history.
Lifting a finger … The next wave of cards will feature fingerprint biometrics. To confirm identity, users of the card simply place their finger on a sensor embedded in it so that the scanned fingerprint can be matched with the biometric data securely stored in the card. This highly secure system means cardholders can pay with just a simple touch.
The fingerprint reference data is stored in the card’s chip. It is not kept on the bank’s servers or transmitted to a personalization bureau. Unlike a PIN code which is an authentication method, biometry is used as an identification method. Payment transactions with a biometric card are more secure because a PIN code can be shared by the genuine cardholder – perhaps, accidentally — but biometric data cannot.
The physical contact is very limited – it’s not entirely contactless – but the ultra-cautious shopper could always opt for a post-transaction dab of sanitiser on the fingertip.
Let’s face it … In China, facial biometrics is reshaping the way consumer pay for purchases. Face scan payment is available at subway stations in cities across the country. Facial recognition technology is not new — iPhone X users were introduced to it three years ago — but as a payment mode, requiring no physical interaction, it has vast potential and even has the capability to predict a repeat customer’s order preference.
Facial recognition works by reading characteristics, such as the distance between eyes and ears. Iris recognition looks at the pattern in one or both of the irises in the eye.
One current concern has been that that the wearing of a mask – a pandemic requirement in many retail and other spaces — might confuse a facial-recognition system, according to a study by the United States’ National Institute for Standards and Technology (NIST). Work is already being done on software that adjusts for masks.
Wear’s the money … Smart wearable devices will allow contactless payments through wristbands, fitness trackers, watches and jewelry and even “smart clothing”. Contactless wristbands have already been used by festival goers and stylish contactless rings were seen at the Rio 2016 Olympics. Funky ToviSorga payment bracelets were introduced by VISA as part of its sponsorship of the 2019 FIFA Women’s World Cup.
In the coming years, we can look forward to more fashion houses and payment technology companies working together to create wearables that serve a functional and financial purpose as well as a fashionable one.
So, how long more before we see the end of cash? That’s hard to say. But the confluence of security, convenience and pandemic is certainly affecting consumer and market attitudes to all that dirty money changing hands. China’s central bank took to sterilising bank notes in regions affected by Coronavirus — though money laundering of any kind is probably something you shouldn’t try at home.