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Emerging Payment Technologies to Watch This Year

Advancements in payment technologies make paying for anything and everything faster, more secure and, in the case of cryptocurrencies, possibly independent of government influence. Whether that last one will turn out to be good or bad is yet to be seen, but most new payment tech advances have the potential to help make people’s lives better.

Here are some emerging features to keep an eye on:

1. Biometric Authentication

Biometric authentication is a form of payment security that approves or denies payments by using a person’s body to authenticate their identity. It exists on many mobile devices now in the form of fingerprint scanners, but more and more advanced forms of biometric authentication are coming out as technologies and processor speeds improve.

One new and exciting application of this technology is the iPhone X’s facial recognition feature. Upgrading from the device’s fingerprint scanner, iPhone X users can now verify phone access and payments using Apple’s Face ID feature. Instead of scanning a finger or typing in a password to validate a payment, users simply look at their phone and the payment proceeds. The technology has advanced enough to account for hats, glasses, facial hair and other variables and, to avoid someone validating a payment using a sleeping face, Face ID requires open eyes to actually function.

If you’re not quite ready for Face ID, you can always opt to go old school and use a password.

2. Cryptocurrencies

Cryptocurrencies are online, digitally stored assets that, unlike the U.S. dollar, have no centralized government backing. That is, there is no government influencing the quantity or value of cryptocurrencies in circulation. Individual units of cryptocurrencies (like pennies and dollars) can be created by anyone with a computer through a somewhat complicated computational process called “mining.” Digital exchange of cryptocurrencies is also, unlike the USD, completely anonymous.

While Bitcoin, the first cryptocurrency, was created in 2009, cryptocurrencies in general have become popular in the mainstream only recently due to rapid spikes in value and their increasing acceptance among traditional banking institutions. Whether you view them as quality investments or not, there’s no denying that at least some aspects of cryptocurrencies will influence the future of commerce. Expect to be hearing more about them.

3. P2P Payment Apps

Peer-to-peer (P2P) payment apps like Venmo have been around for a few years now, but they’ve continued a rapid growth in popularity. These apps allow users to exchange money directly, without having to write a check or visit an ATM.

If you’re at a restaurant, for example, and you need to split the bill four ways, instead of giving the waiter four cards to split evenly, one person can offer their card and everyone else can send that person exactly what they owe via the app. This way, the bill is split fairly. Other common uses include dividing rent, utilities and other household expenses among roommates. Some landlords will even accept rent via P2P payment app.

As new payment technologies arise and as these apps become more prevalent, you may start to see adoption in even more interesting and convenient areas. Imagine being able to pay for your student loans, credit card bills and utilities all in the same app you use to split a cab with your friend. Soon enough….

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

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