FORTUNE’s new issue features a cover story titled “The Death of Cash” by Miguel Helft. In the piece, Helft writes about how the advent of the e-wallet and cashless payments will put cash on “the endangered species list.”
He writes, “Paying by phone will be as transformative as the advent of the credit card in the 1950s. It will change the way we shop and bank. With powerful smartphones and tablets taking center stage on both sides of the checkout counter, it will reshape the relationship between buyer and seller. Not only will the phone or the tablet become a wallet for consumers, but it will also turn into a credit card reader and a register for merchants.”
Helft profiles mobile payment company Square and reports on how it is helping to lead the e-wallet revolution. Helft reports on Square’s growth writing, “Merchants are now processing transactions with Square’s Card Reader at a rate of $6 billion a year, up from just $2 billion a year in October, making Square one of the fastest-growing young companies ever by revenue and one of the buzziest in Silicon Valley’s hot startup scene. It has raised plenty of money from A-list investors, including Visa, which sees Square as a way to boost the use of credit cards. Today the company is attracting talented engineers and executives from Apple and Google. It helps that Square may eventually go public or be acquired for a nice premium, making its stakeholders fabulously wealthy. Valued at $1.6 billion after a $100 million cash infusion last year, it was seeking additional financing at twice that valuation in June.”
Helft reports that Jack Dorsey, the Twitter co-founder who now runs Square, says the adoption of the technology is happening faster than Dorsey expected because people are yearning for a more high-touch experience in all aspects of their lives, including at the checkout counter. Of his ambitions with Square, Dorsey tells FORTUNE, “We want to carry every transaction in the world.” And later Dorsey says, “I think there is a general desire in American culture right now to find something that is more crafted, that is more personal.”
Starbucks is also trying out new cashless models and Helft reports that “the Starbucks experience suggests that consumers will warm to digital wallets. By all accounts the coffee retailer may have built the No. 1 mobile payments system in the U.S., through a relatively simple mobile app that allows users to upload their Starbucks loyalty cards to their phone and then use their phone to pay. The company won’t give precise dollar figures for mobile transactions, though it says in the last nine weeks of 2011 alone, it processed more than 6 million mobile transactions. While the pay-by-phone feature is convenient for customers and has sped up checkouts, payments were not the primary focus of the app.”
Adam Brotman, chief digital officer for Starbucks says to FORTUNE, “We look at the app as a way to tell the Starbucks story.” Helft also reports that “Brotman says the biggest benefit of the mobile app is that it has increased customer participation in its loyalty program, which drives multiple billions in revenue for Starbucks each year.”
Read the full article – recommended – here.
Related articles:
Don’t overlook Apple’s new Passbook or you might miss the future of payments – June 12, 2012
Apple granted U.S. patent for all-new iWallet credit system architecture – June 5, 2012
Inside Apple’s secret plan to kill the cash register – May 19, 2012
Apple’s iWallet: The one that will rule the world – March 21, 2012
Apple’s new iWallet patent hints at new killer app – March 9, 2012
Apple wins major U.S. ‘iWallet’ patent; the one that may one day ‘rule the world’ – March 6, 2012
Apple invents ingenious security system for the iWallet era – January 9, 2012
Apple patent app describes future iOS devices communicating with parking meters, doors, cash registers and much more – September 22, 2011
