A senior writer at CNN’s Fortune & Money describes his recent experience with paying for things without ever taking out his wallet. Is the future of finance going to truly be cashless?
“Café Grumpy is the kind of hipster hangout that wouldn’t deign to trumpet itself. Tucked away on a quiet street in New York’s Chelsea neighborhood, it’s easy to miss. There’s no sign out front, just a frowning face stenciled on a large shop window. And yet when I walked in for the first time, I immediately felt like one of the regulars. “Charge it to Miguel,” I told the barista after ordering a cappuccino, and charge it he did — to my phone. Not that I ever pulled my iPhone from my pocket. Seconds after the barista tapped my order on Grumpy’s minimalist register — an iPad mounted on a stylish countertop stand — my phone vibrated in my coat pocket, signaling that our transaction was complete. I couldn’t wait to check that everything had worked as promised. (It had.) For the first time ever I was tickled by the act of paying for something…
These are telltale signs that the mobile-payments revolution has arrived. But what the glowing profiles of Dorsey — he’s often compared to Steve Jobs — and the breathless predictions about your phone replacing your wallet don’t tell you is this: Changing the way Americans pay for stuff is going to be really hard work. For starters, retailers and their partners will have to offer mainstream shoppers some pretty sweet perks to get them to replace a swipe of a plastic card with a tap of a phone. Then there’s the chicken-and-egg problem: Merchants don’t want to upgrade pricey point-of-sale terminals so that they can work wirelessly with smartphones unless e-wallets become mainstream, and e-wallets won’t become mainstream until consumers can use them just about everywhere…”