Cash Is No Longer King, But Bigger Changes May Be On The Cards

Over the last 18 months the masses truly have converted from cash to card, but while retailers, retail services companies and even religious institutions are all bending the knee at the altar of the contactless card, I'm reluctant to believe the hype

Now that contactless card payments have overtaken coins and paper in popularity at the counter, cash is no longer king. Even the Church of England is relegating loose change to the backs of its patron's sofas in a bid to keep up with the times.

In 2016 credit, debit and charge cards accounted for over 10-billion transactions - that's 54 percent of the total transactions. Therefore, it's hardly surprising that the C of E has chosen to ditch the traditional collection plates for far more modern methods including static contactless donation terminals and handheld machines that can be passed around the pews.

Over the last 18 months the masses truly have converted from cash to card, but while retailers, retail services companies and even religious institutions are all bending the knee at the altar of the contactless card, I'm reluctant to believe the hype. I believe that we're on the verge of a breakthrough that will see the plastic card side-lined to make way for far more impressive and convenient methods of payment.

While contactless payment technology is relatively new to market, the plastic card is fairly dated payment format. In an age where convenience is the driver for meeting consumer expectations, a payment that requires the consumer to carry an unnecessary item is surely due for extinction.

With cash seemingly on the out, why would the convenience-obsessed consumer want to continue carrying a wallet or purse simply to keep their plastic cards safe - especially when considering the emergence of mobile payment and wearable device payment technologies. With public transport, parking meter and toll-point operators making it easier to pay by mobile apps and contactless means, we may be witnessing more than the extinction of cold hard cash, but the relegation of the wallet too.

While rise of card and decline of cash payments makes for ground-breaking news, it is in part attributed to the increase of contactless-enabled cards provided to consumers by the card-issuers.

My own use of contactless payment increased significantly in 2015 when the contactless payment limit was upped to £30 and I have little doubt that this had an impact on the payment preferences of others too. Then there's the 35 per cent increase in contactless payments caused by retailers encouraging shoppers to use contactless at the point-of-sale.

If consumer confidence in biometric security, based on their unique physical attributes such as blood vessel patterns, continues to rise, the use of smartphones for payments with a mechanism such as Apple Pay will continue to rise with it. It's understandable why Apple Pay has plenty of appeal as there is no upper limit on spending. Furthermore, over half of the UK's contactless terminals are now Apple Pay enabled.

Smart watches that act as a wearable of extension of your smartphone and fitness trackers that monitor your physical activity are further proof that beyond smartphones, the popularity of wearable devices is on the rise. For consumers, wearable payment devices such as Barclaycards bPay band should offer the holy grail of convenient means of payment without a requirement to remove anything from a pocket, bag or wallet.

Whatever shape and size they come in, the advantages of faster payment methods will make a noticeable difference on both sides of the counter. Lengthy queues in busy stores will begin to dissipate as a result of shorter transaction times and wearable technologies could eventually enable store staff to take payments from anywhere on the shop floor.

The key point is that, while subject to a splurge in popularity, contactless card payments are not the absolute resolution - though they are a step in the right direction. Consumers cannot be expected to rejoice that card issuers, retailers, hospitality enterprises, civic services and even churches are finally acknowledging the need for increased convenience, but they should be excited about what happens next, should those who want to take their money be ready to invest further in developing consumer focused technologies.

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