Living In A Cash-Free World

A recent report from PayPal “Money: the Digital Tipping Point” states that by 2016 we will be using our mobiles to pay for most things on the high street. Will handsets be the most important thing in our lives to the point where we can leave our wallets at home?

One of the biggest obstacles around take up will be that of security. Consumers will need to have ultimate trust in the technology. We can see from the history of ecommerce that initial concerns over credit card security were quickly remedied, especially once the speed of transactions improved through broadband. With payments going through with a simple swipe, speed won’t be an issue. The banks will also offer the same fraud protection available with credit cards – it’s certainly in their interest to make sure it works.

Our own research in the financial services industry shows that consumers are moving away from cash and are open to new methods of payment. Convenience is the winner. As retailers move away from siloed shopping platforms and in to an omnichannel world where customers seamlessly browse and shop, it’s likely that payment will be made through whichever device we happen to be using at that time; mobile, tablet, laptop or gaming device.

And who will be the major players to benefit from this shift in consumer behaviour? The banks and mobile operators will certainly look to get in on the act. Orange have already teamed up with Barclaycard to launch Quick Tap. PayPal and Google have created their Wallets ready for roll out. Apple will be implementing near-field communication technology (NFC) in next year’s phone and tablet releases, though there may still be a question mark over around trusting a handset manufacturer with our cash. Blackberry’s recent meltdown won't have helped with this perception.

Could we see aggregators come in to the market whose role will be to combine banking, loyalty and promotions? A compelling convenience for any customer. And finally what would happen if Facebook were to enter this market? Could Facebook Credits eventually emerge as a new world economy?

What is for certain is that kids of today will become a cashless generation of shoppers. Hard currency won’t disappear, but will be seen as a niche method of payment as cheques are today.