Goodbye cash


A recent survey by Sage Pay found that 64% of people now prefer to pay by card, while one in three consumers will put goods back on the shelf if card payment isn’t an option.
When we do use cash, it is usually for smaller value purchases. According to payment company WorldPay, two-thirds of all retail transactions are still made in cash, but two-thirds of the value of those transactions are paid for by card.
Geoffrey Barraclough, head of corporate propositions at WorldPay, says that many shops would like to dispense with cash as soon as possible. “In places like shoe-shops, cash has declined to the point where if they can get rid of the cash, then they can get rid of the till, which means they can free up space.
So what are the barriers to businesses moving from dealing with cash to taking card payments?
Mathew Jaffa, senior development manager at the Federation for Small Businesses, says that their member businesses, which typically have fewer than five employees, tend to use traditional payment methods with a significant proportion remaining dependent on cash and cheques.
The chief barrier is the expense associated with chip-and-pin sales. “There is concern about the cost,” says Jaffa. “If you’re not turning over a huge amount, costs are high in relation to footfall and getting people through the door, so you’re not getting bang for your buck. You need a provider that is going to ensure that it’s low cost and with a low admin fee.”
So what are the payment methods we’ll find ourselves using in the near future? And how can SMEs benefit from embracing them?
1. Receiving payments
Many small businesses are providing increased payment options by taking card payments over their mobile devices with the help of small card-reading devices. Technologies such as those developed by app manufacturer Square, Payleven e iZettle, allow small businesses to receive card payments on the move with phones or tablets.
2. Contactless payments
The latest payment innovation to make serious inroads with consumers and larger businesses is contactless card payments. Banks now issue all their customers with contactless cards, and the number of retailers accepting contactless payments has grown quickly.
3. Single device payments
The next step towards mobile device payments is to use your phone in the same way as a contactless card. Barclaycard has trialled a sticker scheme, in which you affix a sticker to the back of your phone, and use it to pay.
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4. Mobile payments
The biggest growth area for payment technology comes as online shoppers shun their laptops and desktop computers in favour of smartphones and tablets. But entering long card numbers, sort-codes and expiry dates without a mouse and keyboard can be a fiddly operation that results in ‘basket abandonment’. As a result, several companies are offering online “wallets”, in which you enter your card details once, and then store them online for use when making payments. Current players include PayPal, Visa, Google and Moneto.
5. Pay with your face
In the UK, it’s only the Queen who can currently pay with her own face, and that’s because she’s on all the cash. But elsewhere, companies are looking at cutting-edge military grade technologies that can let you pay using a hi-tech facial recognition system. Uniqul, a Finnish company, has developed a system that recognises and checks users’ unique biometric information using cameras. Payments can be made in five seconds, and users need neither card nor phone.
6. Pay with your hands
Gesture technology is something most of us are already familiar with, even if we aren’t aware of it. The rise of touchscreen surfaces mean that we are now increasingly swiping and tapping our way into the future.
This is the inspiration behind Secret Handshake – a payment technology that also dispenses with owning any physical hardware. Instead, users will make a sequence of gestures to pay for goods.
7. Pay with your watch
A modern chip-and-pin or contactless card is essentially a bit of circuitry embedded in plastic. So it is surprising, given the rise of contactless payments, that we haven’t seen the technology embedded into more objects. Watch2Pay, in collaboration with Mastercard, is set to change that, with their specially designed contactless payment watch. The watch is paired up with a pre-pay card and can be used at vendors with Mastercard’s PayPass terminals.
The Future
For now, cash is set to remain a fundamental part of life. But as we become accustomed to increasingly speedy payment methods, the rare occasions when we must delve into pockets to pull out a handful of coins and notes will eventually become peculiarly anachronistic.