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From Payphones to Paying with your Phone

Mobile PaymentsDid you see the story recently about the man who paid for his lunch with his hand? In an attempt to push the extreme boundaries of what a life without cash or credit cards and only mobile payments would be like, BuzzFeed News Reporter Charlie Warzel had a microchip implanted in his hand, then used it to pay for a meal at a restaurant.

It may seem like something out of a science fiction movie, but when you think about it, isn’t that the next logical step? How much of your money do you ever see or physically touch? You probably filled out a direct deposit form when you started your job, so that each paycheck goes directly to your bank account without you ever playing middleman to get it there. Then, when it’s time to pay your bills, maybe you’ve set up automatic payments from your bank to your rental and electricity companies, and your gas and cell phone bills are automatically deducted from your bank account. When you go to the grocery store, you probably pay with a credit or debit card, or maybe you already use a mobile payments app.

Everyone seems to be getting into the business of mobile payments. Sure, some are expected, like PayPal and Square, but now you can pay people through the social media apps you use every day, like Snapchat and Facebook Messenger, as well as a host of other phone-pay apps (not to be confused with payphones – a near obsolete technology you may vaguely remember from as recently as the 90s).

In 2015, Apple CEO Tim Cook declared to a group of university students that their kids “will not know what money is.” It’s projected that U.S. consumers will spend $27.05 billion in mobile pay transactions – more than three times what was spent in 2015. By 2019, it’s expected that mobile pay transactions will exceed $210 billion. Investments in financial technology companies reached a record high of more than $19 billion in 2015.

Clearly we’re on a path toward almost exclusively mobile payments, possibly as soon as within the next decade. So, let’s return to our story’s protagonist with the microchip in his hand. Charlie was participating in a month-long experiment for BuzzFeed to pay only with his phone, when he decided to take the plunge (literally…the chip was “plunged” into the fat between his thumb and forefinger using a syringe) into what seemed like the furthest possible extreme of mobile payments.

He had the chip implanted in Stockholm, which is fast on the path toward a “cashless future,” through the help of a biohacker group called BioNyfiken. Paying for things with the chip wasn’t quite as simple as getting the chip implanted. Once it was there, Charlie had to track down some programmers to help him set it up with a Venmo account. It took a few weeks, but eventually his contacts were able to program the chip to launch a website when scanned by a mobile device. The website triggered an automatic payment with tip from Charlie’s Venmo account.

Charlie concluded his account of the “future of money” by describing the successful payment transaction he made with his microchipped hand at a Sri Lankan restaurant in New York City.

It’s not impossible to imagine a future financial system that relies entirely on chips we’ve all had implanted somewhere on our bodies, but Charlie’s experiment to pay only with mobile technology was also not without its frustrations and disadvantages. You can read his full report to get a more complete picture of how his experiment played out in the real world.

His experiment does highlight a new reality that is approaching quickly. Billions of dollars are being invested into financial technology every year, which means more jobs in the industry to both develop the technology itself, and to confront the security and privacy snafus that will inevitably come with a deep dive into putting all our financial transactions into cyberspace.

Financial technology is just one segment of the booming information technology industry, and we’re going to need lots of smart, well-educated people taking on the complex task of turning technology from payphones into paying with your phone.

If you think you’re up to it, you can get started with an online computer science degree from Grantham University.

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