NEW YORK (MainStreet) — The digital revolution isn't just coming--it's already here.
Less than a year ago, the government mandated that all Social Security recipients are required to receive their payments electronically, through direct deposit or a debit card (side note: the debit card is riddled with fees--mostly, it's targeted at recipients who don't have a bank account of their own). Is going check-free crazy?
In May 2011, 85% of all Social Security and SSI beneficiaries were already receiving their benefits electronically, and that was nearly three years ago. In other words, the government isn't just acting randomly to save money on mailing checks (though that's part of the gambit).
Electronic-only Social Security is just one example of the way money is increasingly becoming digitized, a symptom of the Zeitgeist.
Here are some more ways finance is turning digital:
Depositing Checks Through Your Phone
Within the past couple years, lots of banks (including ING, Ally, Citi, Chase, Wells Fargo and more) have begun letting their customers deposit checks through apps on their phones. In general, these services entail scanning and uploading a photo of the check from your computer, or taking a picture of it with your phone.
Receipts by Email
As part of the digital revolution, many companies are going paperless with their receipts. The results are far-ranging, from store receipts at Apple or Macy's to ATM receipts at banks like Citi or Wells Fargo. How does it work? Simple. At check-out, you have the option to print out your receipt or to have it emailed to you.
Enter Credit Card Info Though a Photo
A new trend when paying via apps is that you can capture your credit card info by simply taking a photo of it. Through business-to-business solutions like card.io, more startups and other e-commerce companies can easily integrate this capability into their offerings.
For example, says Abby Hunt, Director of Public Relations at GrubHub Seamless, GrubHub's iPhone and Android apps use card.io's technology so customers can simply take a snapshot of their credit cards when ordering takeout food through their phone apps. Though she declined to share specific metrics, she says, "It is a popular feature. We make ordering [takeout] convenient and easy, and this is simply another way for us to improve the overall experience."
In other words, no more memorizing your credit card number or even typing it in yourself.
Pay Your Rent Online or on Your Phone
Well, if you pay rent to a roommate, at least. Apps like Venmo (yes, the progenitor of those strange subway ads) allow users to exchange money among themselves for free. This is similar in functionality to PayPal, but the user interface is much easier and friendlier, and you can do it very simply through your phone. Although there is an official Venmo app, you can also send money back and forth through text message if you don't have a smart phone.
Another perk is that you can "charge" friends. For example, say a friend lent you $25 and you've forgotten about it. That friend can "charge" you $25 through Venmo, and all you have to do is approve the charge.
Use a Credit Card ... Sans Credit Card Machine
The payments company Square has been rapidly gaining in popularity. The company produces little iPhone attachments that allow you to swipe a credit card and process it through your phone. We've seen it used by many everyday businesses like ice cream shops; we even know a nutritionist who uses Square to accept payments (and email receipts) to her patients! The company signed a $25 million deal with Starbucks last year to power credit card transactions for the coffee giant, though admittedly the rollout of the new technology hasn't been totally seamless.
Through Square Wallet, customers with a Square account don't even have to present their credit cards in person. Using a smartphone, you can open the app, check in to the business where you'd like to buy something and tell the checkout attendant your name. If you choose to, you can enable auto check-in for your favorite spots so all you have to do is walk up, order and receive an online confirmation of your purchase, without ever digging out your wallet or even your phone.
This is obviously a hot space for startups, as competitors have poised themselves to go head-to-head with Square, such as an Intuit version, GoPayment.
No More Punch Cards
That's not to say you can't still buy ten sandwiches and get one free—but instead of toting around a paper punch card, you can keep track of your loyalty points through your phone. For more established businesses (think CVS or DSW, or your gym, if it uses a bar code entry), apps like Key Ring let you connect your accounts so the cashier can simply scan the bar code from your smartphone.
For stores that used old-fashioned paper punch cards, other startups are coming onto the scene. One big player is Belly, an iPhone and Android app that keeps track of your rewards from, say, the local bagel store or beauty salon. The app is accepted at thousands of locations across the country, and in some places like New York City, Belly is especially popular, with nearly 400 locations in Manhattan and Brooklyn as of January 2014.
--Written by Allison Kade for MainStreet