some day all our cities will be smart cities

Smart Cities and Smart Payments

Recently, Bill Gates has announced that he is building a smart city called Belmont. The city will stretch on 24,800 acres of land in Arizona, USA, and will have 80,000 residential units and some 3,800 acres of office, commercial and retail space. One of Gates' investment firms has already dedicated $80 million to the project.

The concept of creating smart cities has been around for a long time, but has only recently developed into a buzzword. Many existing cities around the world have already implemented numerous technology and innovation initiatives with the aim of becoming smarter, safer and more responsive for their citizens. 

Barcelona, for example, monitors and manages traffic through sensors, has implemented smart parking technology, and uses sensors to monitor air quality, noise or humidity to determine how much water is needed to irrigate parks. In 2014, Singapore launched a government initiative called Smart Nation, installing sensors and cameras to track everything from the cleanliness of public spaces to the density of crowds. Last year, New York was named the smartest city in the world, with some strong contestants such as London, Paris, Berlin, Amsterdam, Seoul or Tokyo, for the throne.

Walt Disney's Epcot Center in Florida was supposed to be a real city, not a theme park. Plans from 1968 uncover that Disney wanted to create a futuristic experience in Florida, with everything from "mural TVs" in hotel rooms to state-of-the-art mobile communications and payment equipment, according to Paleofuture. Epcot was supposed to be "checkless/cashless society (with purchases) accomplished through automatic debiting of bank accounts".

However, smart city concepts are not reserved only for the mature markets. Pakistan, for example, has already started turning its cities into smart ones, investing in technology to improve safety, livability and delivery of services, so as to ensure long term sustainable economic growth of the entire country.

The smart city industry is projected to become a $400 billion market by 2020, with 600 cities worldwide expected to generate 60% of the world's GDP by 2025, according to McKinsey research.

What Exactly are Smart Cities?

In a press release, the Belmont Partners real estate group said that Bill Gates' Belmont would create "a forward-thinking community with a communication and infrastructure spine that embraces cutting-edge technology, designed around high-speed digital networks, data centers, new manufacturing technologies and distribution models, autonomous vehicles and autonomous logistics hubs."

More than half of the world's population lives in cities - a number that is set to reach 70 percent by 2050.

In a nutshell, smart cities are defined by extensive use of technology and technological advances to make life simpler and more comfortable for their citizens, bearing in mind sustainability and environmental issues.

Through technology, smart cities make infrastructure more efficient and responsive, integrating seamlessly in everyday lives of their citizens.

Through technological improvements such as self-driving cars, smart transportation systems to detect congestions in traffic, weather conditions tracking, energy efficiency and smart waste management, smart street lighting, broadband infrastructure, camera surveillance and detection sensors, smart cities are truly becoming living entities, lacking only the ability to think for themselves. 

How Does Payment Fit Into This?

Smart cities also need smart payment systems to ensure efficiency, speed, ubiquity and safety of transactions. Digital payments technology is a crucial enabler of smart cities, according to Visa's study Cashless Cities: Realizing the Benefits of Digital Payments.

The research demonstrates that consumers, businesses, and governments could all benefit substantially from deepening and expanding their use of digital payments. Consumers save time in banking, transit and retail transactions, receive a more personalized customer service, and benefit from increased convenience and reduced crime.

Digital payments help businesses thrive and cut costs and allow them to use gathered data to improve customer service, launch targeted promotional campaigns or improve loyalty schemes. Governments, on the other hand, are able to collect more taxes, manage budgets, and reduce crime and corruption, thus ensuring an enhanced quality of life for citizens.

The use of digital technologies – from smart phones and wearables to artificial intelligence and driverless cars – is rapidly transforming how city dwellers shop, travel, and live.

Lou Celi, Roubini ThoughtLab 

 

Both Visa and Mastercard are actively working on providing necessary technology to assure convenient and secure payment ecosystems as basis for cashless, smart societies. Visa has recently introduced the Visa Global Transit Solutions, a worldwide program to foster seamless commuting thorough contactless payments, while Mastercard is working with over 100 cities to help them provide better access to essential needs such as transportation, education, employment and financial services for their residents, visitors and small businesses.