Tuesday, March 17, 2009

Share of Which Wallet?

Is your wallet still made of leather?

I don't mean to imply that you'd go in for a cheap plastic wallet - times are bad, but not quite so bad. I certainly do mean to imply though, that you will eventually go in for a wallet that you are already carrying around - it's merely going through an identity crisis at the moment.

Your cellphone is the wallet of the future. It is also your cellphone, your laptop, your TV, your MP3 player and a primary means of identification - but for the moment, let's focus on the wallet.

Most cell-phone networks in India allow you to pay your phone bills through your cellphone - either through SMS, or through an online payment system. It's only a matter of time before you can use the phone to pay bills of all kinds, no matter where you are.

And having facilitated transfer of money to your billers, why not the rest of the universe? And if you can transfer money - why maintain a one way street? How about being able to have money transferred to your phone? Why not, in other words, make your phone your wallet?

Apart from making the rear pocket on your trousers rather redundant, a wallet-phone has loads and loads of implications. Imagine, for example, having a little chip embedded in the skin of your phone. This little chip stores your license, your PAN card, your voter ID and your credit cards. So instead of handing over your credit card at the end of a meal in a restaurant, you simply authorize payments over a simple Bluetooth transfer.

There are downsides, of course, including figuring out data security - but a simple biometric scanner - say, fingerprint identification, shouldn't cost too much if widespread implementation follows.

The most obvious implication* - every transaction is recorded. Every single one. Eventually, even buying paan from a neighbourhood vendor might be logged. Now, privacy issues will almost certainly mean that you might not be able to access this information at an individual level.

But even if you are able to access it at an aggregate level, you have access to data like you never did before.

Basic demographics, basic geo-spatial data, basic transaction values (ticket-size), time of the day transactions and a whole host of other metrics spring up for you. Spring up for you irrespective of which business you are in.

How do you plan to use it?

* There are other implications, such as the change in your marketing strategies in this brave new world, but we'll cover that in the next post.

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