Proximity revolution: digital payments made physical
The inconvenience of splitting a bill at a restaurant is known to many, not to mention an Uber trip home, when no one knows exactly who has to pay and how much. Imagine if rather than communicating via extraneous means, smartphones could discover each other physically – depending on proximity – and interact directly peer to peer (p2p). Such technology would allow users to easily split bills in restaurants or Uber rides and transform digital payments between friends and family into pleasant interactions.
Financial peer to peer transactions are growing at an incredible rate. According to Business Insider, “high-end estimate is that mobile P2P transactions volume could reach $86 billion in the U.S. by 2018.” Considering these figures, it is no surprise that mobile payment apps are popping up all over the world and names like Paypal, Venmo, Square Cash, Dwolla and Facebook Messenger are only a few on the list.
These apps are convenient for recurring use but they are a bit of a hassle when transferring money to yet unknown contacts. In order to identify each other, users have to exchange email addresses, phone numbers or nicknames, which takes both time and unnecessary effort.
On the contrary, p2p proximity technology enables devices to discover other users directly in the physical world. Thanks to existing onboard radios and appropriate software SDKs, smartphones can discover each other nearby and instantly exchange identification data. This direct interaction replaces the necessity to type in names and numbers, eliminating errors and greatly reducing the transaction time.
Seamless Bill Splits
Splitting a bill at a restaurant or paying for a shared Uber ride often causes awkward money talks between friends. Payment apps are trying to solve this inconvenience by introducing easy ways of sending and requesting money. But technologies used for device discovery, which is necessary for peer interaction, have so far failed to deliver desired user experiences. For example, GPS is not accurate indoors and heavily drains the battery.
p2p proximity technology, unlike GPS, is battery efficient and highly accurate indoors. Instead of relying on constantly pooling satellite signals, p2p proximity uses low power radio to estimate the range between nearby devices, typically from a few inches and up to 60 yards. Ranging allows smartphones to understand which users are close by and which are further away, thus enabling bill splitting or cost dividing between people based on their physical proximity. Such features could greatly improve user experience in scenarios like ride sharing or dining together with friends in a restaurant.
One may argue that proximity interactions could be served by other technologies such as beacons. However, beacons require dedicated hardware which must be deployed on site, set up, and maintained over time, thus multiplying the overall project cost. On the contrary, p2p proximity requires no additional hardware and hardly any maintenance. For p2p proximity to work users simply need to carry a smartphone, making it very easy to use the technology outdoors and on the go.
A future where p2p proximity greatly simplifies mobile payments with nearby friends and family is just around the corner. So whether it’s payback for coffee, lunch or sharing a ride, mobile payments are about to turn into fun and instantaneous experiences, which literally take just seconds!