Jeff Bezos, the founder of Amazon, wants to read your palm.
He doesn’t want to tell your fortune though. He wants to make it easier to buy stuff.
The most profitable technologies are so easily and frequently used, they almost become invisible. Like smartphones, for example: The typical smartphone is within its users’ reach almost 24 hours a day: On the nightstand while sleeping, next to the sink while showering, in the middle console while driving. The smartphone is always there, and nobody thinks about it.
But what are people even more attached to than smartphones? Body parts.
(Pun intended — sorry about that.)
Imagine if, instead of using a credit card or a smartphone, you could pay for things with your hand. Just wave your palm across a scanner and the purchase goes through. If your smartphone is around, it doesn’t come out of your purse or pocket.
This is the future Amazon is pushing— or the next step of it anyway.
As the Wall Street Journal reported last week, Amazon has filed patents for “a non-contact biometric identification system” with “a hand scanner that generates images of a user’s palm.”
It’s not just a pie-in-the-sky idea. Amazon is already working with Visa on beta test transactions. They are talking to Mastercard, too, and they’ve reached out to the major banks.
Financial services, along with healthcare, are a “next big thing” for the tech giants. The race for the consumer’s wallet is inevitable, and it’s already underway.
Amazon wants to share the hand-scanner technology with high-frequency brick-and-mortar businesses. The ideal place to use it would be a store, shop, or restaurant where the consumer visits multiple times per month. If you’re a local, you could wave at the people you know and pay for your stuff simultaneously.
There are lots of questions around a hand-scan payment device. How would the system handle fraud? How would users load their accounts? How could a user have more than one account? And how would Amazon (or whomever) make money off the system?
One possible gain for Amazon would be a vast new trove of consumer data. If millions of users were making purchases in physical location in real time, and uploading data to the cloud as they did so, Amazon could mine that data to improve the accuracy of its advertising business.
It’s intriguing to think about where this could go — for better or worse.
For example: If the payment-by-hand thing works, why stop with a hand? Why not graduate to retina scans, which would be virtually impossible to fake? (Nobody can see the pattern of blood vessels on the back of your eyeball.)
Or why not use advanced machine-learning and artificial intelligence (AI) to combine a whole variety of physical signatures, from gait to facial recognition to breathing patterns to heart rate, to biometrically identify someone the moment they walk into a store?
“No need to identify yourself Mr. Anderson — we already knew it was you.”
The possibilities here get dystopian very quickly. But that isn’t Amazon’s fault — they are just pushing the inevitable technology trend. Emergent implications of AI and software and machine-learning capability are going to grow ever more powerful, and ever more unsettling, whether we like it or not.
One positive aspect of the future is a lack of body modification.
For a long time, futuristic predictions included humans putting microchips under their skin, or otherwise physically merging with computers.
Implants remain possible, but there won’t be a need for them. External devices will be able to handle it all. For example, it will soon enough be possible — within the next decade or two — to wear a t-shirt that has computing power woven into the fibers, with the ability to monitor the wearer a hundred different ways.
The real unknown here, from an investing standpoint, is who gets disrupted next.
The banks and card providers and payment facilitators of today are participating with Amazon, Google, Apple, and Facebook in designing the payment systems of tomorrow in part to catch a piece of the next big wave — and in part because they are terrified of getting drowned by it.
For the big banks especially, working with big tech has more than a little Godfather rationale: “Keep your friends close and your enemies closer.”
The incredible complexity of initiatives like a hand-scan payment system — coordinating across major players nationally and globally, solving incredibly challenging technical puzzles along the way — also helps explain why an era of trillion-dollar tech giants is at hand.
The next round of tech innovations headed our way have a general signature of being mind-bogglingly complex and sophisticated, requiring large-scale coordination, huge engineering and design resources, and huge pools of capital to invest in research and development — all factors that favor the big getting bigger and the small getting acquired.
TradeSmith Research Team