Digital IDs will make card payments & cash transactions irrelevant
Completely frictionless consumer payments at the point-of-sale are in use, but far from common. Advances in cloud, distributed ledger technology and open banking now make it possible for such transactions to go mainstream. The key to wide adoption is digital identities. Banks and credit unions are in a good position to lead the way.
Even a routine purchase like putting gas in the car requires consumers to think through how they will make the payment. Will they use a credit card, debit card, cash, or a digital wallet?
Once they decide, they have to navigate through their wallet (digital or physical) and make the payment. Usually that requires an additional digital entry or even paperwork before they can pump the gas.
While people are used to this routine (and others like it) there is a better way. Consider this simplified scenario: A consumer pulls up, pumps the gas and drives away. That’s it.
The payment is made without anything being done by the driver. This type of “invisible transaction” may become common sooner than many think. Already a variation of it is in use at Amazon Go stores in several cities where people can buy goods and “just walk out” — no checkout required.
Here’s what has to happen to enable this type of frictionless payment in an open environment, such as the gas pump scenario:
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