Filed Under:Agent Broker, Agency Technology

Exploding e-Wallet

New technology eliminates credit cards and cash

I can remember my first wallet. I was around 14 years old and had found a summer job making minimum wage. My proud parents gave me a new wallet with a penny in it "for good luck." I’m not sure where that tradition started but it seemed natural to my New England roots.

The smell of the leather and its new stiffness made it a thing of beauty. Like most men, I kept it in my back pocket and over the years as I grew, the value it carried and the importance of it grew, too. Well into adulthood, as I added a driver’s license, credit cards and other paraphernalia, the wallet played an even greater prominence, not only in my life and but on my rear end, as well. It soon took on the characteristics of George Costanza’s exploding wallet from the "Seinfeld" TV series.

Not terribly long ago, after watching a news segment about pickpockets, I made the momentous shift of moving my wallet to a front pocket and, out of necessity, changed to the smaller profile of a trifold style. I even tried wrapping a rubber band around the wallet to make it impossible for someone to ease it out of my pocket, a trick I learned from my father-in-law. My wife went so far as to give me a present of a wide rubber band with an engraved sterling silver collar on it.

Related: Read the article "App attack" by AA&B managing editor Melissa Hillebrand.

My love-hate relationship with wallets continues to this day as I currently carry two different wallets: one for my cash, identification cards and some credit cards; the other for my business cards, of which I have two different ones, plus a space for those new ones I am given from people I meet. When I received my first iPhone and began loading apps, I was hopeful that exchanging contact information would be as easy as "bumping" phones. It isn’t.

The allure of the once future technology of "smart cards" was just a phase that never seemed to come to fruition. Even today, there are credit cards with RFID chips that allow a charge to be made for purchases merely by waving them near the scanner. The infrastructure for that technology has taken off with readers in most retail stores, but it doesn’t address the overriding goal, which I believe is to eliminate all forms of physical and tangible currency. That’s where the move to e-wallets might take us.

"e" doesn’t stand for "exploding"

e-Wallets use a technology called near field communication (NFC), the next generation of contactless chips. NFC allows consumers to make purchases without having to use credit cards or cash at the point of sale. The NFC-embedded mobile phone, once authorized by the owner, would make payment to the retailer from the owner’s tied bank account.

More than that, it also transmits coupons and loyalty points simply by swiping the device near a specially equipped cash register. The success of this technology depends on whether it reaches, as Malcolm Gladwell put it, the "tipping point." It is expected that the number of phones with NFC capabilities will double in 2012, from the 35 million shipped this year to 70 million.

According to Gartner, in 2014, 340 million global mobile users will make mobile payments totaling $245 billion, up from $32 billion last year. Like adoption of similar technology (think smart card), e-wallet devices are taking off more quickly in Europe than here in the U.S. and not surprisingly, one of the first areas to accept e-wallet payments is with online casinos.

Security concerns

Security of the data stored in an e-wallet device is a major concern for a lot of people. Some believe it’s bad enough when you lose your phone, but to lose your credit card information and other financial data at the same time is too much. It’s the same kind of concerns voiced by many people when online buying first came on the scene.

Related: Read the Gilman article "Collaborate with".

Back then, people wouldn’t think of entering their credit card information on a website, especially in light of the hacker news items that was reported periodically. The truth was, as others pointed out, your credit card was no more secure when you would give it to the waiter at a restaurant to pay the bill. You never knew what was happening to that number when it was in the back being rung up.

Since then, security measures have improved along with technology improvements; 256-bit encryption is now becoming the norm, allowing for a certain level of user comfort. User-configurable lockout settings allow the most rigorous security to be adopted. As NFC technology is used for more than just commerce, such security takes on greater dimension.

Along with allowing the phone to act as a debit/credit card for payments, NFC technology, together with readers, can serve as a mobile ticketing device for access to all sorts of venues, including transportation, entertainment and accommodations. Don’t be surprised if your phone becomes your electronic key for access to your car, home or office, hotel room, etc.

With wide-enough adoption, this technology can change the way we not only pay for things, but access places and provide information about ourselves.

So what, if any, implications might this technology have for agents?

Beyond the obvious of perhaps accepting premium payments via NFC devices, I can see the potential of it capturing insurance information. Imagine you’re in a fender bender and you go to exchange information with the other party. During such stressful events, getting all the right information you need may not be foremost in your mind. But picture standing there dialing the police or your insurance agent to report the accident, and this time your phone is independently exchanging insurance data with the other person’s phone; then, while you’re on the phone with your agent, it transmits the information directly to his or her agency management system.

Quickly, accurately and efficiently, you could file a loss notice and begin the claims process without the lag time of having to dictate all that information.

What about storing information about an insured’s belongings, and then when a loss occurs, that information can be transmitted electronically?

Related: Read the article "5 next-generation technologies" by Deborah Smallwood.

Like George’s exploding wallet on "Seinfeld," e-wallets will be about more than just commerce; they also will serve as a filing cabinet of all the important information you need to carry with you. Essentially, it is the concept of the smart card merged with the mobile technology of smart phones.

Password security is critical in any agency’s office. We’ve all heard the stories of agency employees who keep passwords on Post-it notes wrapped around their monitors. In a random search of the word "password" in the App Store for my Apple Mac, I came across 53 different apps that all offer a secure interface for your passwords, ranging in price from free to $59.99 for a business app. Most are under $10.

I’m not suggesting any of these, especially in light of the fact that you need to operate in an Apple environment, but I’m certain the PC world has similar solutions. This is all part of the emergence of e-wallet platforms.

The convergence of technologies, platforms and solutions seems to be more and more common as we travel through the ever-hastening pace of change. Whether you’re driving down the highway or traveling through this myriad of technological opportunities, your eyes should always be sweeping the road ahead. You never know when there’s a particular rest stop you might want to visit. I see this column as giving you a heads up on that roadway.

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