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The Perfect Storm

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The Perfect Storm: Instant Gratification Meets Delayed Payment

Buying things you want has never been easier than it is today.  With a few clicks on your phone (or even your watch) you can purchase almost any good or service imaginable.  You can order a pizza, purchase a week’s worth of groceries, buy concert tickets.  You can even get an automatic bonus on Candy Crush.  If you have a “smart home” you can set the program to automatically order certain goods when you run low.

This wasn’t always the way it was done of course.  If you want to go really far back, you’d have to club what you want and drag it back to your cave.  But even in the past 30 years the evolution of payment has sped up astronomically.  The vast majority of these conveniences are linked to credit rather than actual cash (in the bank or otherwise).  This is where we reach the perfect storm – where instant gratification meets delayed payment.

Stalking the Sale

It has never been so quick and easy to make a purchase.  Companies strive to make things as easy as possible for you to fork over your money for their goods.  Online advertisers specialize in targeted ads.  These keep track of what you look at and have purchased to upsell you on related products.  Imagine a brick and mortar store (Best Buy for example).   Now imagine if every time you went in you took a stroll through the TV aisle to see the latest and greatest.

Over time the TV displays crept towards the front of the store so they were the first thing to greet you.  Finally imagine that the GPS on your phone would push a notification that TVs were on sale the next time you came within 100 feet of the store.  It borders on creepy but that is where we are at in terms of ease of purchase.  It is a bit of a (bleep) storm.  The Harvard Business Review had an article about targeted advertising and its effect on consumers – check it out.

Biometrics

Methods of payment are also becoming incredibly easy.  This is the second front that makes the storm even stronger.  Do you remember the old days where you actually had to insert a credit card and enter a pin number to make a purchase?  Yeah – those are now the old days!  Now with chip technology you can make purchases with a wave of your card – and we aren’t even close to finished.  Enter biometric spending.

Biometrics covers things like your fingerprints, retinal signature and even your DNA itself.  The same things that solve crimes on CSI essentially.  The next wave of spending convenience is tied closely to this science.  Imagine having your Visa linked to your eye.  You wouldn’t need your wallet or even your phone with you to make a purchase.  Just a quick scan and you make your purchase (just don’t blink!).  Mastercard actually launched a product in Europe that allows you to pay using a selfie.  “That’ll be $121.53” #duckface…Accepted!

Mobile Payments

Biometrics may take a while to really come in to mainstream markets, there are some stores that are even archaic enough to only accept cash, we are a long while away from streamlining the buying process in any type of universal way.  One method that has been around for a solid 5 years or so but has really taken leaps and bounds in the last year is mobile payment.  Apple Pay is a big example of this technology.  You link your account with either a credit or debit card – and your phone becomes your method of payment.  I for one am not a fan of Apple products, but Google answered quickly with Google Wallet & Android Pay so you are covered no matter what your preference is.  Check out this comparison between the products at How To Geek.

A Big Stinky Load of Debt

Debt levels in Canada have steadily climbed over the past few years – though that trend is somewhat deceiving.  Canadians with no, or even small debt loads, are continuing to maintain their levels.  Those in deep with creditors are digging the hole deeper and deeper driving the overall averages further into the red.

The Eye of the Storm

We are constantly surrounded with purchase temptations, geared specifically towards our interests and technology is making it easier year over year to fork over your hard earned dollars.  These conveniences are a great thing for those who are able to control their use of credit, but on the dark side of things they also enable those who aren’t good with money to make very quick, but bad decisions.

As someone who has struggled with debt in the past, I have to say that I think that more distance between the buyer and goods is good.  However, since I am living debt free I think it is great to take advantage of the ease that the technologies have brought.

Like so many topics, there are two ways to look at technology.  For the time being I’ll favour the advances in technology and will continue to try and help those that struggle with debt to rethink the way they run their finances.  That way we can all enjoy what innovation has to offer.

Are you in favour of the advances in payment and targeted advertising technology? Or do you think they drive too many bad decisions that are hurting consumers too much?

Scott

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