Take out your cell phone. In your hand right now is your financial future if you want to get rich.
Your smartphone is about to become your new "digital wallet."
When it comes to your credit, your investments, your banking relationships, how you shop, how you are marketed to and how you pay for everything, your new digital wallet will be at the center of it all.
Understanding what kind of hardware your wallet takes, who delivers your digital services, and understanding your relationship to digital money will be the keys to making a bundle off of it all.
In fact, as the race to shape the future of e-commerce and e-payments develops, fortunes will be made by investing in the companies destined to be big winners in this fast-growing trend.
With that in mind, here's a snapshot of what's here now, where the trend is headed and how you can ride this phenomenal wave all the way to your own private beach.
The Rise of the Digital Wallet First, you have to realize that you don't use a lot of cash-even though you think you do.
The truth is the whole world is using less and less cash.
On the low end, Swedes transact commerce in cash only 3% of the time. Europeans pay with cash 9% of the time. And Americans pay in cash only 7% of the time.
The rest of the time we're using credit cards, debit cards, prepaid cards, checks, coupons, the Internet, and increasingly, cellphones.
There are several reasons why we're using cash less.
One reason we're using less cash is that governments don't want us using cash.
Take America, for example. The U.S. used to issue notes in denominations of $500, $1,000, $5,000, $10,000, and $100,000. Printing of large denomination notes stopped in 1945 and they were taken out of circulation by 1969.
Besides the cost of printing and minting cash and problems with counterfeiting, governments like to keep tabs on who has money and who is and isn't paying their taxes.
That's a lot easier in the digital world, where electronic transfers are easily traceable.
Of course, we've also gotten used to the convenience, and most of the time the "safety" of using plastic and electronic transfer schemes to buy goods and services and pay bills.
So, naturally, as more and more of us lighten our pockets by combining our calculators, our day-minders, our cameras, our memories and our access to the wider world with our smartphone touch screens, it makes sense to dump our wallets in there, too.
Identifying trends, new technologies, applications, "contact points" and "stakeholders" in the world of digital commerce and payments is the first step to successfully investing in this soon-to-be explosive space.
This One is Going to be Enormous And make no mistake about it. It's going to be huge.
But first, there are a lot of questions that investors need to address and get the right answers to before they can start counting the gains in their digital portfolios.
Who are the players now, who is getting into the business, who will the winners be?
What role will telecom providers have? Will they continue to just facilitate connectivity, or will they start buying downstream servicers and vertically integrate new technologies?
How will banks react to the threat of disintermediation as new players trample their turf?
What trends and needs will shape hardware, and who will emerge as the leading device makers?
Who will profit from proliferation of new applications? What will drive software innovation and how much room will there be for existing and up-and-coming contenders in the ever-evolving software wars?
What role will social media play in the future of e-commerce and how will social media aggregators monetize interconnectivity of their members?
Who will emerge as the point-of-contact device makers, connecting buyers and sellers at point of sale spots?
Who will command the high ground in the all-important security services battleground? How will data be stored and by whom?
Who will own the data and how will data be monetized?
What role will merchants play and how will some steal market share from competitors by using new digital wallet applications?
How will global use of digital wallets change marketing and advertising and who will be the big winners in this important space?
There are almost as many questions to ask about who the winners and losers will be as there are opportunities to profit from the inevitable future of a digital wallet world.
Here's the thing: I'm all about you and me making money on this rapidly unfolding destiny.
But it's impossible to set us all off in the right investment direction in a single article. The space is too big.
That's why this introduction to the opportunities inherent in the new age of digital wallets is just the beginning.
It will be followed up by more comprehensive reporting providing the details on what I've touched on here.
Investing in the Digital Wallet And as it develops, you will receive more Money Morning articles about emerging trends and companies that are shaping the landscape in this wild-west frontier.
Of course I will be recommending lots of specific investments to my Capital Waves Forecast subscribers, but I will also be supplying my good friend Bill Patalon with great company names and investment recommendations for the avid followers of his Private Briefing columns.
Why am I going to give Bill some insightful information and picks?
Because Bill has been urging me for more than a year to command this exciting space and apply my research resources to it.
And, thanks to Bill I'm overwhelmed by the opportunities I've uncovered.
So, he deserves credit and some hot recommendations that I know he can't wait to pass along to his Private Briefing fans.
On Wednesday, I'll dig even deeper into this money-making trend. So stay tuned.
[Editor's Note: In the age of the digital wallet every electronic device will need a first-rate security system.
In fact, 2.5 million cell phone subscribers were hit with malicious viruses just in the first quarter last year. We've found a global cyber-security outfit that is uniquely positioned to corner the market on security for these devices.
You can learn more about this investment opportunity by clicking here.]
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Tags: digital wallet