August 22, 2012

NFC: A Step Closer to the Single Global Currency

NFC: A Step Closer to the Single Global Currency

"A global economy requires a global currency"
Paul Volcker, former U.S Federal Reserve Chair.

There is a global movement going on right now.

Whether you realize it or not, our day-to-day lives are about to change. 
Soon, we will no longer need to bring our credit card in our wallet.

We won't be asked for our license and registration when we get pulled over, or an ID when we go to the gym, or even a passport when we go crossing the border.

We'll no longer use cash or as I said our credit cards to pay for our breakfast in the morning, our groceries or when we take our loved ones to the cinema.

And before you know it, you won't even have to carry a wallet anymore.

That is because, there is a breakthrough technology called "Near Field Communication" (or just "NFC"). We all soon be using our smartphones in place for our digital payment needs.

In fact that nobody will go unaffected by this global movement, it's so big that we have to step all the way back to a frigid February evening in 1949 to put everything into perspective.

On that fateful night, Frank McNamara made an embarrassing mistake that would forever change the world...

As the story goes, McNamara -- a prominent New York City businessman -- had just finished dinner with his lawyer and the heir to the Bloomingdale's department store fortune when he discovered something that horrified him...

As you may have guessed, he'd forgotten to put his wallet into his back pocket.

Thus leaving him no way to pay for the lavish meal he had just treated his associates to.
Eventually, McNamara was forced to call his wife and have her bring him enough cash to cover the bill. And he was so humiliated by it that he became obsessed with developing a way to never have to worry about carrying cash ever again!
Back in 1950s, a handful of stores were issuing "charge cards" that allowed their customers to buy and pay for everything later. But the humiliated McNamara was determined to take this concept even further.
He developed a single, multi-purpose "credit card" that not only could be used to replace cash, but would be also be accepted at a variety of different businesses.
Sure enough, one year later McNamara returned to the exact same restaurant with the exact same friends -- and, yet again, no cash whatsoever.
Only this time, rather than feeling excruciatingly embarrassed, he simply paid for the meal with a small piece of cardboard that later became known as a "Diner's Club" card.

Initially, he issued about 200+ of these "credit cards" to his friends and business associates. At first, they were accepted at just 14 locations.
Of course, nobody of any consequence really gave
this little "experiment" a second thought...

Because, as McNamara's doubters loved to point out, there were literally hundreds of things that could potentially go wrong with such a payment system (not surprisingly, NFC is facing all the same doubts right now, as you are reading my blog.
But, as news of this new, simpler way to pay for everything from clothes to groceries spread, more and more people began wanting to get the credit card McNamara had created. And before long, things really began to snowball.
Because once more and more people started using them, more and more businesses were forced to start accepting them -- or risk losing customers to competitors who did.
And once more businesses began accepting them, even more people wanted to start using them. And so on... and so on...

Today, over 10,000 credit card transactions take place every single second and the total value of goods and services purchased with them now totals more than $2.5 TRILLION per year around the globe.
Now, there's no telling if NFC will end up taking off quite that fast. It will probably never replace credit cards. But here's one thing you can bet on:

After all, we have increasingly been using the smartphones and tablets to do just about everything. Including: 
  • including check the weather
  • monitoring stock quotes
  • get directions ( Have you ever try to use your GPS in Jakarta traffic jungle?!)
  • log on to Facebook
  • send e-mails
  • listen to music
  • surf the web
  • play games
  • and even watch movies.

So it only makes sense that we would eventually start using them to pay for things, too. And thanks to the NFC you can now do that.

But make no mistake, NFC isn't just going to change the way we pay. It's actually going to change our lives by completely eliminating the need to carry:
  • Car, house, and office keys (Simply tap your NFC phone to an NFC lock and you're in.)
  • Plane, train, and bus tickets (Simply touch your phone to an NFC sensor and go.)
  • Passports, driver's licenses, and other forms of ID (Now, this is a little bit scary! Just place your smartphone up to the NFC reader and all of your info will be transferred instantly.)
  • Business cards (Simply tap your phone against a colleague's phone to swap business cards, contact lists, and even resumes.

Still a bit skeptical? Of course you are!
And that's exactly the point...

just think about this

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About ArrowFX

Technically analyze the forex market mainly on USDJPY, EURUSD and GBPUSD by using market rhythm method started by Philip Nel on Forex Factory. The thread started on 2007 and still alive.
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