Money is probably as old as human civilization. People once used sheep and goats as money: domestic animals and food served as currency in ancient times. Metal coins have been around since 700 B.C., and the Chinese began using paper money in 140 B.C. It became a popular means of tender during Europe’s Renaissance and later in the American colonies.
But paper money has drawbacks. For instance, it’s easy to steal. And if something valuable, such as gold, does not back it, notes can proliferate and lose their worth.
After World War II, money began to convert from paper to plastic. In 1950, Diners Club introduced a credit card that people in New York City could use to pay for restaurant meals.
Payment-card technology turned a new page in 1979, when Visa brought out an industry first, the electronic data-capturing terminal. This is the now-commonplace system whereby a merchant or consumer swipes a plastic card with a magnetic stripe through a unit that automatically secures authentication and approval from the cardholder’s bank.
Today, with 12B USD between credit and debits and 200M credit card transactions a day just in US, the way people pay for items matters more than ever.
Now in most developed countries credit cards are the dominant payment form. However, the ubiquitous credit-card magnetic stripe, with exposed numbers that make it so easy to compromise is as outdated as VHS videotapes.
A truly mobile wallet has long be described as imminent, but it remained elusive; most industry efforts has been a disappointment or have not yet worked well enough for mainstream adoption.
One reason for this might be that most people that worked on mobile wallets started by focusing on a business model centered on their own interests, instead of focusing on customers and their experience.
Following its user-experience centered tradition, Apple unveiled yesterday a new payment process called Apple Pay.
Apple Pay key element is a new chip, called “secure element”, embedded in the upcoming iPhone 6 and 6S that keeps your personal information secure and private, linked to Passbook.
With Apple Pay, that will be release in October as an update to iOS 8, you can easily use your future iPhone 6 camera to take your card information and add it to Passbook. After that, you can just pay with your touch, thanks to link between the iPhone payment components and fingerprint reader.
It’s important to notice that when you add or use a credit card, Apple doesn’t store the credit card number or merchant information. When you pay, Apple uses instead a dynamic code that last for the duration of that only transaction, that will remain private between you, your merchant and your bank.
This for the physical world, thanks to NFC-enabled POS (Point of Sales) devices.
To extend this innovation to make online purchasing just as fast and secure, improving a process that is really really cumbersome, with long forms you have to fill out every time you shop for an item, Apple introduced yesterday one-touch checkout.
As in the physical world, also online you can make a purchase within a digital customer experience app with no card number entry, no need to type addresses, or expiration date, in essence: no card information shared with merchant, thanks to the one time payment number generated by the secure element embedded in your phone.
At Neosperience, we bet Google and PayPal have been up all night updating their strategic plans. It looks like that the time to allow your customer pay you with a touch has finally come.