Cash: Are Its Days Numbered?
The UK Payments Council has published a report on the future of cash and it contains a lot of detail about how Brits make payments. The message is that cash is on the decline right across the board. For example, employees being paid cash in hand is on the decline. State benefits payments have nearly totally inverted. 10 years ago 87% were paid in cash whereas today 79% are paid directly into bank accounts. We're also paying for our pints more and more by card not cash. I guess the trend will only continue in future. Cash, for all its advantages of immediate full and final payment for example, has many disadvantages. Mobile payments and mobile wallets will be factors in this change, along with increased use of debit and credit cards, with electronic transfers replacing cheques gradually too. The device that none of us leave home without is set to become indispensible. Japan is already showing us the way forward with the FeliCa based mobile suica (wallet) that many people have. We're forecasting that one in ten users will use mobile ticketing in 2014 globally. Further uses include buying physical goods such as flowers and gifts (especially at the last minute on the way home!), transferring money to friends and family both in developed and developing countries, and operating your bank account from your phone. But what could hold back the march of mobile payments and banking? Well naturally every new service development has its hurdles to overcome and for payments by phone I think security is the key factor that banks and payments companies will need to communicate to users. No matter how secure the service really is - it's all about communicating that to users and convincing them. Some people are reticent about online purchases and banking and the identical challenges exist for mobile. However, once over this hurdle, convenience and ease of use will drive forward usage.