The future of payments is not to have payments

Everyone is still marvelling at Amazon Go, an innovation that seemingly sprang from nowhere. After identifying yourself to the store via a mobile app, you pluck products from the shelves and then just walk out. The store identifies when you pick up and put down products, so that it knows what you take with you when you leave, and your account is charged some time afterwards. It’s disruptive even, with pundits predicting massive jobs loss and a rewiring of the retail landscape.

Amazon Go isn’t unprecedented though. There were clear signals that that future of payments wasn’t to make payments frictionless, but to eliminate payments entirely. Amazon Go was entirely predictable if you knew where to look.

Prognostications on the future of payments are commonly built on the observed trend for electronic payments to become ever cheaper, faster and more common. Cash is being pushed to the side while cheques are retreating to the high ground.[1] Cryptocurrencies are assumed to be the ultimate expression of these trends, as these natives of the digital world might even make payments frictionless. Improvements in technology are clearly one factor determining the future of payments. In the past they might have even been the most significant factor. However, during our research for “The Future of Exchanging Value: Cryptocurrencies and the trust economy”[2], we found that social pressures now have a stronger influence than technology.

We forget that payments, and money in general, are not an inherent part of society. Back in the village, prior to the industrial revolution, most people had little use for money as we transacted with people who we knew and trusted. The world ran on debt, based on trust, while money was a technology for transacting with someone we don’t know or couldn’t trust. It’s for this reason that money has something of a cultural stigma about it. Money is ‘dirty’, which is why we have the filthy rich. It’s also the reason that all the Abrahamic religions have cultural prohibitions against dealing with money. We don’t like money to live at the centre of a relationship. However, this is what happened when the industrial revolution resulted in the mass market, as we found ourselves transacting with merchants who we didn’t know, might never see again, and therefor couldn’t trust.

The advent of the internet, modern smart phones and social media changed all this. Now we want a relationship with those we transact with, we want a shared narrative, to know them. Consumers want a relationship that doesn’t have money at its centre, and they now have the tools to demand this. We can see this in three trends.

First, payments are moving in time. Starbucks are a good example of moving a payment back in time, to before the purchase, by providing a stored-value card tied to a loyalty scheme. A ‘skip the queue’ coffee ordering app, does the opposite, moving a payment forward time time, into the future, by tying clearance to placing the order with settlement sometime later, via an account sometime after the goods are provided.

Second, payments are moving in space. Consider Apple’s Apple Store app, that enables you to walk into an Apple Store, pick up a product, scan its barcode with your phone and then walk out of the store never having interacted with a member of staff or point of sale system; the payment has leapt from the point of sale to the customer’s phone.

Third, payments are moving away from a 3rd party currency into a shared store of value, an account or, more interestingly, a loyalty scheme as Starbucks did. While an obvious opportunity for cost savings by aggregating transactions fed to the payments networks, a benefit Starbucks realised with the stored-value card, this also enables a more granular and nuanced approach to managing loyalty rewards.

If we keep these three trends in mind then Amazon Go isn’t a surprise. Rather, we start wondering “why did it take so long?” The future of payments isn’t for us to make more and smaller payments, a world dominated by constant micropayments mediate by e-wallets hosted on our smart phones. Nor is it a world where we moving our exchanges of value to some stateless currency. The future of payments is not to have payments at all.


[1] Crystal Ossolinski, Tai Lam and David Emery (June 2014), The Changing Way We Pay: Trends in Consumer Payments, Payments Policy Department Reserve Bank of Australia <>

[2] Peter Evans-Greenwood, Ian Harper, Robert Hillard, Peter Williams (Jan 2016), The Future of Exchanging Value Cryptocurrencies and the trust economy, Deloitte Australia <>

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