Why cash is still alive ... until optimized Java thrives

According to economist Robert Reich, at least 95 percent of transactions in the United States have “nothing to do with physical pieces of paper or coins.” Most people today use a combination of credit cards and online payments, mostly for bills and money transfers. One FirstData study estimated that two-thirds of all bills will be paid electronically in 2012, a 20-percent increase from 2007. PayPal has grown to be what The Economist labels “arguably the world's biggest bank, with more than 100m account holders.”

The Growing E-Payment Ecosystem

Wireless and mobile-to-mobile vending terminals, as well as digital wallet systems, are poised to eventually upend the credit card, turning us into a truly cashless society. Parking meters, vending terminals, ticket booths, hotel check-ins — all are evolving to support digital mobile payment. Square, which sells the white mobile-enabled credit card readers that are taking off among small businesses, is one of the fastest-growing startups ever by revenue, according to this Fortune article. More than 2 million merchants are processing $6 billion per year in transactions, up from $2 billion last October, Fortune reports. Competitor Intuit GoPayments saw its client base grow by 1,200 percent in 2011, according to the Economist.

With the potential for such a large return on investment, every industry player wants to stick an oar in the e-payment income stream. Google, eBay, Apple, Verizon, AT&T and VeriFone are just a few of the players introducing their own products. Near-field communications devices, direct-carrier billing systems, QR payment services and contactless cards all coexist, Research and Markets writes, with no clear winner or standard having yet emerged in this market segment.

As Reliable as Cash?

Cash might not be king anymore, but consumers still need to have reason to fully trust e-payments. Cashless digital payments are subject to inherent glitches including slow networks and back-end latency, or worse. During the recent Olympic soccer match between Great Britain and the United Arab Emirates, an e-payments system crashed. Fans could only pay cash for beverages and food. Bobsguide reporter Neil Ainger put it this way: “Cash won’t let you down with a technology failure.”

Better performance will drive consumers to adopt e-payments. The architecture of e-payments must to be solid and fast every step of the way in order to facilitate trust. Once digital payment systems are as reliable as credit cards, consumers will demand more e-payment services from businesses. Put simply, performance will drive the tipping point that will make electronic digital payments mainstream.

Infrastructural Requirements for Mass Adoption

From the front-end to the network to the back-end, e-payment infrastructure is in place and works. But some parts may experience more latency than others, slowing down the entire e-payment process. In order to improve performance and reliability, however, the industry must take a nuts-and-bolts approach.

Java is one important moving part in this equation. Java is involved in every step of the e-payment spectrum. Many front-end applications running on smartphones use Java or Java-like languages in handsets. Some network control infrastructure is written in Java. Back-end payment systems are generally made of legacy systems combined with newer features — and those newer features are primarily implemented in Java. It goes without saying that Java-based applications needs to be optimized as a key part of driving overall performance and customer satisfaction.

Where Java is Out of Its Comfort Zone

Are mobile payments pushing Java out of its comfort zone? When it comes to consistent response time, reliability and handling large amounts of memory, the answer is yes. This becomes especially apparent on the analytics side and back-end, moving parts that must be lightning-fast. A delay of seconds on the corporate back-end often times out user applications.

In this scenario, the Java Virtual Machine (JVM), which is the software layer which actually runs Java applications, must evolve in order to handle all the information in the transaction stream. A modern JVM is inherently robust, elastic and scalable. Enterprises should inspect for outdated or insufficient JVMs as a matter of course when modifying their systems to handle widespread e-payments.

Mobile Payments Without Limits

The e-payments industry is currently in a Catch-22. Game-changing services like e-wallets won’t see mass adoption until consumers feel safe. Meanwhile, retailers won’t transition to mobile payments until they see further adoption. The key driver for adoption is a seamless and easy end-user experience, which can only be achieved by optimizing systems in every part of the end-to-end application chain. Performance and reliability are paramount and once achieved, the sky is the limit in terms of global adoption and making mobile payments the norm in our day-to-day lives.

* Author's note: None of the companies or products mentioned within this post are business partners or clients of Azul Systems, nor does the author have any financial interest. 

Copyright © 2012 IDG Communications, Inc.

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