It is hard to pinpoint exactly when credit cards began because there were different varieties dating back to the mid 1800s, but the credit card as we know it, probably came into play in the mid 1900s. Since then it is almost impossible to find anyone in the developed world over the age of 16 who doesn’t have a credit, charge, or debit card of some kind. The old cheque book has become a thing of the past. It’s plastic all the way, and in more recent times other payment options have spr
ung up and are being developed right now.
PayPal is one example. You can now download its app, ‘PayPal Here’, to your smartphone, although it is not working yet. But when it is working, you will be able to get paid wherever you are on your iPhone. Simply plug in a card reader and swipe.
PayPal is a bit thin on the detail, but you can already pay for goods in bricks and mortar stores using PayPal. It claims $20 billion was spent globally with PayPal last year – quite a bit of money in anyone’s language.
There seems to be a new method of buying or selling springing up every day, many of which I hadn’t heard of. Square, iZettle, and Payleven are a few that have been operating for years, albeit in niche markets.
Enter a new payment method in Australia called Touch Payments. The concept has been around for years on Sky TV in the UK and is now being launched in Australia.
The USP of this system is that the merchant gets paid up front. The customer chooses Touch Payments at checkout and enters their mobile number to get approved for the purchase. The merchant is immediately paid and the shopper has 16 days to pay Touch Payments with BPay, bank transfer, Australia Post, PayPal, or using a credit card.
What makes it extraordinary is that Touch Payments is financing the deal, accepting the risk, and the merchant gets paid immediately less a small fee. The customer gets the goods before payment is made, whether purchasing online or instore.
Technology has enabled this. It is now possible for creditors to obtain a credit rating in real time, thereby instantly approving most debtors.
What is interesting is that hardly a week goes by without an offer arriving in the post, online, or by telephone to swap from your current credit card to another. There is usually a short term incentive, but by and large, you end up where you started.
The innovation that is now creeping in makes paying cash a thing of the past. In fact, many merchants prefer payment in non-cash.
Stuart Bennie is a retail consultant at Impact Retailing www.impactretailing.com.au and can be contacted at stuart@impactretailing.com.au or 0414 631 702
