Going cash-free: what does the future of payments look like?

By Josh Smith

“Cash is king!” may still ring true on Wall Street, but pretty soon technology will be telling us all that, “the buck stops here.”

Like it or not, the future of payments isn’t on printed bills and noisy coins, but rather on the other device you already carry in your pocket or purse -- your cell phone.

Other countries have been using their mobile phones to make small payments for years, but the U.S. is just now entering the game in a meaningful way.

So, what does a cash free future look like?

At the center of our future payments is our smartphone. This device will allow us to make payments in new ways and in new locations.

Making Payments

Google Wallet now lets owners of a specific phone make payments at the same tap to pay stations that have been accepting credit cards.

This technology is powered by NFC, a small chip that allows your phone to securely communicate to a terminal when it is nearby. You will still need to enter a PIN on your device to make this possible, but no more grabbing for your real wallet.

As you can see in this Google Wallet video, there are a number of other ways that you will benefit from a wallet that is part of your phone, such as coupons and loyalty programs that don’t require you to remember any cards or clippings.

Soon, your smartphone will come with this same technology. These payments tie into your credit and debit cards, as well as prepaid cards that you can load up for controlled spending or to give your kid an allowance on his phone.

We may also see stickers that attach to the back of your current phone to enable NFC transactions.

Another way you may be making payments is on someone else’s smartphone or tablet. The Square card reader is a small credit card reader that plugs into the headphone jack of Android phones, the iPad and the iPhone.

As you can see in this video, the square card reader will let you make a payment with the same credit card you have been using, but because it attaches to smartphones, you will be able to use your card in new locations. Think, at a festival or small business that didn’t typically accept credit cards. I know I can’t wait for my dry cleaner to get one of these.

Anyone can get a Square card reader, and start accepting payments, which means even you can start charging your friend’s when they ask you to pick up the tab because they don’t have any cash. Just keep in mind the 2.75% transaction fee.

There are a number of new payment ideas out there, but these are the closest to coming to your pocket and becoming a reality. As we move forward, I anticipate even more integration with our phones for payments, discounts and loyalty.