We know technology is taking over more and more of our lives, and the area of credit, banking and finance is no exception.So I wanted to share two big inventions that you have to know will be pretty commonly used within the next year or two:
The first one is called person to person banking, or mobile to mobile. Starting in the spring, if you owe your buddy 20 bucks, or need to cover half of a restaurant tab, you’ll no longer need to find an ATM, or your checkbook. You just need to get your friend’s e-mail address or telephone number, and you can send the money directly from your cell phone in a few seconds.
It’s already rolled out in Europe and Asia, and will easily be embraced by tech people and the 20-something age group first, because they have grown up with the internet and on-line shopping. But the rest of us will follow, because over half the population now does some kind of on-line banking.
If you remember, the first big one is and was Paypal. An on-line company that allowed you to pay for your E-bay purchases from your credit card or bank account. That company was so successful, E-bay purchased them. It was also something the banks had no interest in at the time, thinking there’d really be no demand for on-line payment services. They were dead wrong, since Paypal now has 78 million active accounts.
But this time, when it comes to mobile person-to-person, the banks are at the front of the line to implement this technology. They’re thinking maybe 25 cents a transaction as a fee. Now, that might not sound like much, but like all their other fees and service charges, it’ll add up to a few bucks a person, and billions in total revenue.
PNC Financial and the credit union of Boeing are at the front of the line to roll out this new technology. MasterCard is working with a different provider, and Visa is already testing the program through US Bancorp.
Here’s how it works: You simply sign up for the service with your bank or another provider. Enter someone’s e-mail address or phone number to send the money, and it’ll be debited right from your account, just like any other bill payment you do on-line. The receiver just chooses to have the money deposited to a checking account or a credit card as a payment. And the great news is that cell phones are way more secure than any computer system. They are way harder to hack into, making this new person-to-person banking system safer than any of your current on-line payments.
The second one is very cool, as well. How would you like to do almost all of your banking in your housecoat, right from your computer? Within the next year, you’ll be able to make any bank deposit right from your computer at home without ever leaving your home, business, or office.
You just need to scan the cheques you’re depositing, and e-mail that scan to your bank. The financial institution processes the deposit with all those transit and account numbers on the bottom of the cheque. They’ve got the numbers on a scan, so they don’t need the original! You can literally throw the cheque away after it’s received. It really is that simple with just a computer and a scanner. Plus, going one step further, one bank in the U.S. has already started taking deposits done electronically with your smart phone.
A little less lofty is that one in five ATM’s in the U.S., not in Canada yet, scans your deposits the same way. You’re still leaving the house, but your ATM receipt is the actual scan copy of what you deposited as a receipt. Fidelity Investments ATMs were among the first, but it’s getting pretty common already. I’ve done it a number of times in the States and it’s really slick to have that copy as a receipt. What’s great is that this saves the banks a fortune, too. The payback on the software is only 14 months. But first the Canadian no-service banks need to get the software sooner, rather than later, please!