I was only a pre-teen at the time, but this memory will stick with me forever.  My older sister had just received a Sony Walkman for her birthday .  I had never seen one before and I wasn’t really sure what it was for.  My sister seemed to be ecstatic and played with it for hours.  Then, I finally got a chance to use it and I put on the headphones – I was in awe.  I couldn’t believe all of the sound coming out of these little ear phones – I took them on and off repeatedly, still amazed at the difference.  The contrast just astounded me – how could there be so much sound in such a small, portable device.

Over the years I’ve had similar experiences with some technology: high detail video games, HDTV, the iPad, etc.  But the other day, I experienced this feeling again, and it was in a surprising area to me: payments.  I went to meet some colleagues at the Cafe Grumpy to grab a latte and witness a new payment method.  Jack Dorsey’s company, Square, had recently announced a new payment method where one merely states their name – no ID, no credit card swipe, no holding up my phone.  It sounded interesting.  Since it was a new technology, only a few merchants were offering it in NY and hence I headed to one of them (Cafe Grumpy).

I had prepared too – I downloaded the Card Case app to my iPhone, entered in a credit card, and took my picture on my iPhone.  It was all set up.  I walked into the cafe and saw my colleague, who was already drinking his espresso.  He told me to go order something, so I headed over to the counter.  Their PoS ( point of sale) was an iPad – no typical cash register here.  I said, “May I please have a skim latte and ‘put it on Bob please’?”. The clerk said “sure” and I saw my profile on his iPad with my picture.  He chose me and the latte and said thank you.  That was it.  I didn’t swipe a card; I didn’t wave my phone or take a picture; I didn’t even have my phone in my hand or the Card Case app open.  I was in awe.

This was clearly a transformational experience for me – I saw how future generations will experience paying and “checking out” of a store in the future.  The idea of cash, or credit card swiping will likely be absurd – they won’t know anything different than this reality.  What was really interesting to me was that a real friction point had been removed with this process – checking out was now easier.  The payments area is clearly an segment that is ripe for disruption and there are many intriguing players – I don’t know which technology will win, but the industry is clearly an area that will change dramaticly.

However, as I walked back towards the office, it dawned on me that I may not have even fully grasped what I’d experienced and what the future holds.  While what I saw was amazing, it occurred to me that the real power was in the layering of other graphs (like social or informational) on top of the new payments graph.  The new payment systems could be linked to my Facebook profile and alert people that I know who walk by that “bob likes Grumpy Cafe – come in for a half priced latte”.  Furthermore, the data play becomes huge.  A merchant can analyze who their best customers are and directly market to them.  They can see customer trends, optimize product, and maximize customer flow.  Advertisers / merchants would clearly see the power of the data – marketing could be more targeted.

Needless to say, the experience opened up my mind to some of the possibilities…and as my modern day Walkman (the ipod nano) reminds me each time I use it, I probably haven’t even scratched the surface on the possibilities…..

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