Visa is planning to introduce a virtual-based payment method with the implications of Near-Field Communications. Visa has been in business since 1970, leading as an authorized payment method ever since. This has led them to think outside the box and introduce this method of payment to stay ontop and to keep customers happy and introduce the convienence of things. Their main goal for this virtual-based system is to have multiple 'wallets', as currently we have multiple cards. Visa claims that they are prioritizing the security holes that potentially could be associated with using such machine, with the need of stricter authorization for big-ticket purchases needed. With many other competitors that have tried to use such wireless-based payments, it hasn't really caught on. However Visa hopes that based on their reputation and a rework of the system, that a majority of people will be using their system.
With this new form of payment, this could potentially further devalue physical currency, such as our bills and coins. Many more consumers will be looking for such convenience because a majority of them would already be carrying their virtual wallets around, without the need of carrying anything physical on them. However, as many competitors have tried this system, it seems as people still rely greatly on the implications of physical currency. It's just more convenient for the average credit card holder when it's just a quick charge for something. However consumers will be led to use their wallets more because there is no physical link attached to them. Everything's digital and people will spend more than they need to due to this fact. As from a business standpoint, there would be an average of increased transaction charges as this is solely a new business, incurring those higher costs associated with installing and providing such services at an early stage, defeats the profitability aspect for a virtual-based system initially.
I believe that in the future, this will work. People will be travelling with virtual wallets everywhere. However the virtual wallet, in my opinion, will be limited to just payment methods. It's just too risky to further increase the potential of virtual wallets by keeping our own identification on it as it just doesn't work that way. Being virtual doesn't necessarily mean good though. Consumers will be spending more on average, which from a business standpoint is fantastic. However as a consumer, they'll be left in greater debt, potentially causing another recession. From a business standpoint, early adopters will have to spend more on average per transactions due to the initial installation and the inner workings still being worked out for the system. Eventually, this system will be most convenient and cost saving but as for now, it still hasn't reached its potential.
Source: http://www.cbc.ca/news/technology/story/2011/05/11/technology-visa-digital-wallet.html
http://blogs.forbes.com/tomiogeron/2011/05/11/visa-digital-wallet-with-one-click-buying-to-launch-this-fall/
This was a well written blog. I find it very interesting how everything is becoming virtual so quickly. You are right about how we will have to spend more money than ever having to spend more to obtain the virtual money since you have to have access to technology to pay. This might also be an inconvenience to many people who either don't have access to electronics or have no idea how to use it (like the very young and the elderly). Personally, I like to have actual money on me, rather than a illusion of money on a screen. I feel safer that way, because there are so many hackers that could try to steal "virtual money."
ReplyDeleteElena Jiang Su