Check your wallet right now. How much cash do you have in it? Chances are, it’s less than €50 – if you carry any at all.
With the growth of contactless payment and mobile technology, cash is slowly going out of circulation and 2019 will be the year that cashless starts to go mainstream. In Sweden, for example, cash accounts for only two percent of the value of all transactions; in essence, the country is almost cashless.
However, going cashless comes with its own set of challenges. Cash is now so obsolete in Sweden that many banks won’t accept it – and with no storage place for their paper money, some Swedes are taking to hiding their cash in microwaves.
It’s, perhaps, a bizarre outcome that belies the true ease of cashless – though, culturally, attitudes shift hugely from country to country. A recent study in Germany by its central bank found that many Germans prefer cash as it gives them better control over their spending, while in the Netherlands only 45% still use cash.
Depending on where you are in the world, going cashless may or not be your first choice – but regardless of your overall stance on going cashless, the evidence is empirical: cash is increasingly antiquated and as a merchant, the onus is on you to provide your customers with payment options to suit them.
Mobile takes the mantle: bridging the gap between cash and digital
The Nordics may happily be leaving cash behind but there is some derision around the world – it’s a gap that mobile can bridge as proliferations in tech means smarter ways to utilise money, both for consumers and merchants alike. Self-service kiosks and vending machines are carving out a niche while apps and digital services are leading the race to optimise the process as efficiently as possible. No doubt, we’re at the tipping point of mass adoption and while we’ll still have cash (global culture is too diverse to fully shift), mobile adoption will only continue to increase into 2019 and the future.
Mobile Payment Methods
Mobile Payments
Such as , which allows payments using a mobile number
Mobile Wallets
For example, Google Pay and Apple Pay, which let you load your card details into your phone.
QR Codes
Scan a code to pay for an item – traditionally by sending money to a merchant code or phone number.
For fintech companies and banks, it’s a race to create the most complete solution, with Open Banking.
Consumer choice will vary: some will prefer an app while others may want a complete digital wallet. Apple Pay and Google Pay are current market leaders, which is no surprise given both company’s position as tech monopolies, though Apple is particularly limited by the NFC capabilities of the iPhone for third parties.
Perhaps the greatest proof-point of mobile pay is in China, where 50 percent of transactions are initiated via QR codes with AliPay and WeChat Pay. It’s a system that applies from market stalls right up to retail conglomerates: on a street market a transaction might look like the following.
A consumer wants to buy fruit so they approach a stall. They take out their phone and use WeChat Pay to scan a sticker with the QR code on it. The transaction goes through; the person pays and the fruit is theirs.
The apps in Europe
Closer afield in Europe, many companies are making strides with their apps, for example:
The ultimate end-goal is to create an “all-in-one” digital wallet/app that integrates a consumer’s loyalty/gift cards and payment details in one place. For consumers, the benefit is in ease of use and disregarding the unnecessary clunk of cash and loyalty cards.
For retailers, the boon is in gaining a wealth of valuable consumer data and facilitating easy transactions for customers. It’s a concept that’s already taking flight. For example, in the Netherlands, leading supermarket brand Albert Heijn is taking grab-and-go convenience to the next level with AH to go stores, where customers pay without going through the checkout.
Instead, they register with an app, and then, in-store, they can select the items they want, tap their paired card (eventually they’ll be able to use their smartphones), and go. Within 10 minutes, the payment comes out of their account.
It’s that ease and efficiency that’s prompting the move to mobile.
It’s simple: mobile payments are the future so every merchant should facilitate them or face being left behind.
Cash is increasingly antiquated and as a merchant the onus is on you to provide your customers with payment options to suit them.
Open Banking is another name for PSD2
It requires that banks in some countries release their data in a secure, standardised format so that it can be shared and used more easily with authorised, safe third parties.