Digital
PHP.RUHR 2020 – Web Development & Digital Commerce
Can Printed Money Be Replaced by Digital Payments?
Digital payments are quickly becoming widely accepted. A recent report by Juniper Research suggests digital payments will increase by $ 2.2 trillion over the next five years. The results of the study are especially pertinent for e-commerce sites as the largest percentage of increased digital spending will occur through the virtual purchase of consumer goods. More advanced methods of virtual payment such as Bitcoin promise increased security and reliability. However, e-commerce sites might not see widespread acceptance of crypto currency in the next year or two.
Challenges Associated With the Acceptance of Bitcoin
Bitcoin resembles cash transactions in numerous ways. Unlike credit card purchases, the transactions are anonymous and irreversible. Consequently, it is conceivable that Bitcoin could be used for everyday in-person purchases as well as virtual purchases. Vendors do not have to worry about challenges associated with accepting credit cards including lag time between transactions and acquisition of funds, disputed transactions, and traditional swipe fees.
Successful merchants typically follow one rule. It is important to make it as easy as humanly possible to allow customers to complete transactions, regardless of payment method. Currently, numerous shoppers are not familiar with Bitcoin, and unfamiliarity poses a challenge. The nation of Australia only started to recognize Bitcoin transactions as taxable, and other governing agencies struggle with the concept of accepting crypto currency as “real” currency. Until there is widespread acceptance of crypto currency, it is unlikely that successful merchants and vendors will be able to eliminate cash transactions. However, the transition from printed money to digital payments is viable given time and continual education.
Will Bitcoin Become a Widely Accepted Payment Method?
Widespread acceptance of new payment methods historically has taken decades. For example, Visa was launched under its current name in 1977, and MasterCard was launched under its current name in 1966. Both credit card giants took a several decades to become mainstream payment methods in the United States. E-commerce sites are highly competitive, and the success of individual sites is heavily reliant on positive user experience.
Currently, e-commerce sites and mobile app purchases introduced consumers to one-click purchasing on a broad level. Similarly, e-commerce sites such as Groupon sell experiences in real life rather than merchandise, and transactions are instantaneous. The dynamic nature of mainstream e-commerce makes the concept of an online crypto currency economy likely in the foreseeable future.
Concerns About Standalone E-Commerce Sites and Consumer Trust
Consumers want protection against various types of fraud on e-commerce sites. One proposed solution is to create a standard portal which supports all e-commerce activity. Regulation of all e-commerce activity would be an enormous undertaking, which additionally might not be particularly sustainable. Currently, credit card companies, banks, and merchants suffer substantial fiscal loss due to credit card fraud online. Additionally, numerous consumers risk identity theft. Experts attribute the rate of fraud and theft to numerous variables, including undereducated webmasters and merchants. However, theft and fraud is often unavoidable no matter what payment method is used.
Common Risks and Rewards Associated With Credit Card Transactions
Consumers are aware of risks associated with credit card use, but customers are also aware of benefits. Unlike stolen cash or bitcoins, stolen funds from a credit card can be refunded by the financial institution backing it. In the Catch-22 scenario, financial institutions and merchants have to suffer fiscal losses in lieu of customers.
E-commerce transactions that use bitcoin are irreversible, and they are similar to cash transactions. If cash is given away and an item is not received, buyers have to work directly with vendors or e-commerce platforms to resolve the issue. However, consumers currently find working directly with e-commerce giants than credit card companies is a more efficient way to solve issues associated with virtual transactions. Plus, buyers have additional identity protection when using crypto currency as a primary payment method.
Customer Service Can Make Bitcoin Mainstream
Surprisingly, major e-commerce sites with a strong focus on customer service such as Amazon do not focus marketing efforts on customer service options for buyers. Similarly, eBay has increased its focus on being a buyer-friendly platform over the past several years, but numerous buyers are unaware of the change. The responsive nature of major e-commerce platforms can make bitcoin transactions viable for buyers and merchants. After all, few buyers or merchants want to complete transactions on a platform that is not viewed as trustworthy or responsive. Merchant and buyer trust is integral to adopting new payment methods, and successful e-commerce sites typically function like successful big box stores in order to build and maintain positive reputations.
The Possibility of In-Person Transactions Without Cash
Small cash transactions pose a substantial issue for brick and mortar storefronts. For example, the Federal Bureau of Investigation reported over 5,000 bank robberies took place in year 2011, and over $ 38,000,000 in cash was stolen. In the age of mobile technology, it makes sense to emulate cash transactions and eventually replace printed money for individuals that can suffer small personal losses that are nearly impossible to recoup as well as larger businesses.
Increasingly, merchants use apps to swipe credit cards for small purchases in order to better serve customers. Additionally, merchants have recognized the value of virtual transactions via smartphone as funds are not lost. The use of crypto currency can better streamline routine purchases by immediately transferring funds rather than forcing merchants to wait for bank transactions to complete on banking days. Replacing printed money with digital payments is not as farfetched as it might sound. After all, a lost smartphone with funds attached could be similar to a lost wallet. However, smartphones have additional security measures. Wallets do not.
What Experts See in the Near Future for Merchants and Consumers
Bitcoin has gained recognition as taxable currency by first-world nations, and numerous experts speculate that crypto currency will make printed money obsolete in the near future. The transition away from printed money will likely be gradual. Over half of Americans own smartphones. In order for smartphones to truly replace wallets, the percentage of Americans that own mobile devices needs to reach over 90 percent. In order to better put things in perspective, information recently leaked that the iPhone 6 will be a wallet. Is it happenstance, or has tech giant Apple predicted the future of digital payments?
Top image ©GL Stock Images
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Digital Erasers: The Next Big Money Maker
If I were making investments, I’d invest heavily in tattoo removal. No one has figured out a perfect removal process, but when someone does it will make millions. And robotexting: when is someone going to invent a robotexting app that will text my wife/mother/brother so I don’t have to? “Sure, Honey! I’d be happy to run to the store for you. Txt me the list.” I don’t have time to be polite via text: robotexting better get here soon before my relationships fall apart. Digital erasers? Now there’s an investment: every kid growing up five years ago to now and far into the future is going to need one when they start applying for jobs or graduate school. What lucky programmer is going to write the code that will crawl the entire Internet, deleting embarrassing content for 20-somethings who were imprudent teens? That software will easily make millions, maybe even billions….
Digital erasers weren’t even a thought in people’s minds until the absolute folly and imprudence of youth appeared drunken, sometimes illegal and certainly offensive in places like Facebook, Twitter and every social media outlet teens frequent. It used to be when you were young and acted stupid, it didn’t go beyond your local town, neighborhood or school district. If you got an unsavory reputation, the problem could be solved by moving away, thus wiping the slate clean. Very few of us have unsullied memories of our teen years: what are the teenage years for anyway, if not for carousing, rebelling and testing limits?
But what if all the folly of your youth followed you into your job search? Studies show that 91% of employers use social networking sites to screen potential employees. What if it showed up on your applications for graduate school or housing? Online indiscretions and bad reputations are not easy to shake—certainly not as easy to leave behind as an offline and physically, not electronically, situated troubled teenage period.
Whatever! It’s apparent that no matter how many teens ruin their reputations (or get arrested!) by posting drunken/nude/foolish photos of themselves on the Internet, others do not take warning or see any cause for caution.
By Alton via Wikimedia Commons
Understanding this problem, California enacted the Digital Eraser Law in September. It’s a nice effort, with a noble goal: to protect minors by prohibiting online merchants of adult-only goods from advertising to minors and by making it mandatory for any “Internet Web site, online service, online application, or mobile application” containing a minor’s information to remove that information at the request of the minor or any third party. In regular language, that means children in California have a right to delete any information they have published on the Internet, the right to digitally erase any content they have created as children.
Great idea, California, but practically impossible to pull off. “Embarrassing photos spread virally, and internet archives automatically create copies of nearly every piece of information on the web,” TechCrunch reminds us. This is problem #1: even though teens have the right to erase content on sites where they originally posted the content, they may not know how many copies of the content exist on other sites.
“From my reading, the second someone reposts anything you share, you lose control of it,” the Daily Mail reminds us. Once a picture is re-posted on another site, the person who originally posted it is not the only owner of the information and therefore cannot delete it. SnapChat is a popular app with teens and the assumption is that pictures sent via SnapChat disappear, but in reality those pictures can be captured by the receiver and live on forever once re-posted on the Internet. The illusion of protection via automatic picture deletion is just that: an illusion.
Education about the reach of online posts and information is another problem: teens and children have limited, if any, knowledge of copyright and certainly don’t imagine the ways in which their information/posts can be re-posted and used by people unknown to them. Privacy settings? Why should they care?
According to one study by the Pew Research Center, of the teens active online:
- 59% have deleted or edited something that they posted in the past
- 53% have deleted comments from others on their profile or account
- 45% have removed their name from photos that have been tagged to identify them
- 31% have deleted or deactivated an entire profile or account
- 19% have posted updates, comments, photos, or videos that they later regretted sharing
So they do care…enough to remove some content. Critics of the Digital Eraser Law have suggested that it could backfire by reinforcing bad habits and removing the consequences of bad choices and actions. How will children learn from their mistakes if they are guaranteed erasure of them when they turn 18? Will teens assume that they can magically clean up their online reputations when they reach the age of adulthood so feel they have no reason to curb their behavior online?
The digital eraser idea is a great one–golden!–but the fact is, it doesn’t work. Not yet. Deleting yourself from the internet is still harder than you imagine. The million dollar idea is not just that teens need a digital eraser: adults need help managing their reputations online, too. Especially famous adults. Politicians and celebrities make mistakes on Twitter and social media, but online reputations are also ruined by gossipy bloggers and comment trolls. X-pire, released by German software designers, is a new “digital eraser” software that will delete pictures after a specified amount of time, but this requires foresight and only deletes the pictures where they were first posted: it doesn’t crawl the Internet to find re-posts and wouldn’t be effective if you haven’t put it in place before posting. And, let’s be honest, if we all thought about it before we posted something unwise online, we probably wouldn’t post it.
For now, those with heavily damaged online reputations attempt to trick search engines with the help of “Online Reputation Managers“: paid technologists who make it their job to manage, maintain and salvage people’s Internet lives. Julia Allison, former dating columnist for Time Out New York magazine whose reputation was damaged by unsavory posts and pictures on Gawker, “compares the scar to her online reputation to a large tattoo: ‘Technically, it’s possible to remove it, but it’s painful and expensive. Plus, there’s no guarantee that you’ll ever remove it 100 percent.’” The ill-advised tattoo and the offhand, offensive Facebook post bear striking similarities: each functions as a rite of passage with painful consequences. The removal tools for both remain ineffective and yet give a false sense of security.
Looking for your next million? Tattoo removal and digital eraser software. You heard it here first!