by Tom Olago
In the U.S, cash is becoming increasingly less relevant and valuable for transactions. Some stores are even entirely “cashless” in America and around the world. Nearly 1-in-5 consumers do not carry any cash on them. In total, more than 60 percent of consumers carry $20 or less in cash.
Surprisingly, about 1-in-20 people say they don’t use cash and refuse to go to places that accept only physical currency. (This is according to a survey by Walker Sands, a Chicago-based public relations firm, conducted over the last year among 1,046 consumers across the United States). Nationaljournal.com published these statistics in a recent article by Matt Vasilogambros titled ‘Cash Is Dead. Are Credit Cards Next?’
Matt’s report also points to other surveys that show a similar trend: According to a 2012 study by Javelin Strategy and Research, 27 percent of purchases in 2011 were made with cash. By 2017, the group expects that number to drop to 23 percent. So, yes, we’re headed toward a cashless society, concludes Matt. But what about plastic credit cards, as well?
Says Matt: “The future of money has arrived, and it’s called Coin. It looks like a credit card. It’s the size of a credit card. It swipes in credit card machines. But it holds the information of up to eight of your debit, credit, rewards, or gift cards. And you can switch between cards by simply pressing a button.
The new product launched recently, promises to change the way consumers spend money in a secure and efficient way. The key technology is a Bluetooth signal. To load information from your different cards, just swipe them on a card reader into your Apple or Android phone and take a picture of the card. If you’re too far from your card—like, say, you leave it at the restaurant—your phone gets a notification. And the Coin’s battery lasts up to two years.”
The replacement of plastic cards by other more versatile forms of payment, such as those based on digital mobile technologies is clearly on the rise globally.
Normally, you walk up to the shop counter to pay for your groceries and then just whip out your cash or credit card to pay for something. Nothing new there, however getting out your smartphone instead to make the payment, is something which is far less globally prevalent, and another step forward to a completely cashless society that eliminates the need for both cash and credit cards.
Enter SnapScan. Based on a recent CNN report this is an award-winning new digital mobile payment method developed in South Africa. The smartphone app, which is free to download, allows buyers to pay for goods using their phone, without having to worry about carrying cash or credit cards.
Currently, SnapScan is only available at formal merchants in South Africa: each SnapScan-connected store has a unique code that is linked to their bank account. When customers want to pay, they can scan the code with their SnapScan smartphone app, which then brings up the store where they are making the purchase.
“All you do is you type in the amount and punch in the PIN and press send and it’s gone — it’s all done,” explains Malindi, a coffee shop day manager in Cape Town, South Africa. “You’ve got your secret code (four-digit PIN), so if your phone goes missing for example, you don’t have to worry about people using your phone,” he adds.
The transaction is complete with SnapScan charging the customer’s debit or credit card for the amount they are paying — similar to a normal card payment. 21% of urban South Africans are said to have the smartphones required to use the technology. According to Kobus Ehlers, co-founder of the SnapScan app: “SnapScan was developed in South Africa for the African market, so we try to find really local and relevant solutions and I think it’s going to get a massive uptake,” he adds.
“Technology in general is going to get a massive uptake in Africa as we don’t have those legacy systems,” continues Ehlers. “People aren’t used to using credit cards for example; they can skip right ahead and start using cutting-edge payment technology.”
The technology seems to have similarities to Google Wallet (launched in 2011) that allows users to store information for their debit cards, credit cards, reward cards, or gift cards on their mobile phone. For participating stores, someone can just tap their phone to a PayPass terminal to pay for a product. Google Wallet users can all send money through Gmail attachments.
It’s interesting to see how almost every other day, some technological advance occurs that reduces the need for cash or credit cards, hastening the day when none of them will be required. A simple biochip on your body will contain all the cash and credit to your name that you need. The Book of Revelation warns that one day everyone will be required to have a mark in their right hand or forehead in order to buy or sell. One can’t help but wonder if today’s technology is paving the way for this day sooner than one may think.