Will the Wearables Revolution Spark a New Debt Crisis?

by Matt Klassen on September 23, 2014

For much of the last decade America has been mired in a difficult debt crisis, an economic maelstrom that has crippled once stalwart corporations and citizens alike, leaving many stripped of financial independence and mired in unending debt. But now just as the nation is finally getting its collective head above water we’re confronted with a new technological and economic reality that threatens to send many of us once again cascading into the economic abyss.

Over the past few weeks we’ve witnessed significant advances in both the field of wearable technology and the associated field of mobile payments, as Apple has released Apple Pay along with its new Apple Watch while Samsung has teamed up with PayPal to bring mobile payments to its wrist-mounted platforms. While these advances come as no surprise, they do come with unexpected dangers, as the overarching concern of the technology and financial worlds are not to help you maintain your financial security, but to find easier ways to separate you from your cash.

In fact if there’s one thing the national debt crisis has shown us its that most people depend on credit to maintain their quality of life, and that many of those people simply do not know how to properly manage their debt. But, like it or not, with the emergence of mobile payment technology people are about to find new ways of draining their bank account without a second thought, a reality that once again has the potential to drown us all in debt.

Now don’t get me wrong, I see great potential for mobile payments and I have long said that it will, for better and for worse, become the new economic reality, but that doesn’t mean the road to get there won’t be fraught with dangerous economic potholes, ones that will invariable swallow more than a few people along the way.

The simple fact is that by marrying mobile payments with wearable technology users will lose many critical checks and balances currently in place, meaning spending money will become so easy that most people won’t give it a second thought, they’ll just swipe their watch or phone and off they go. Now analysts will argue that the digitization of money is nothing new, as most of us hardly use cash anymore, meaning that even with debit and credit cards our money is nothing more to us than numbers on a page, so in that respect, the mobile payment revolution won’t be a big jump, we still won’t see the money we’re spending.

But the difference I fear is that spending has become too easy, meaning that impulse buying has become far too easy as well. In turn, increased impulse buying will invariably mean a greater drain on people’s personal resources, as delusions of the “American Dream” will compel people to purchase more and more things they simply can’t afford. Now I don’t think I need to draw a map from here to an increase in missed mortgage payments and other difficult financial realities that will cripple more than a few adopters of these new technologies, the only question that remains is how far-reaching will it be?

In the end the prospect of devices having more and more autonomy over our finances is a disturbing reality, as the market is still in its infancy and likely fraught with unforeseen dangers and certain unwelcome guests (do we really trust Apple with our finances?). As CRM Buyer writer Denis Pombriant wonders, just “as many people get their heads above water, will devices suddenly submerge us all over again?”

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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