For years now, analysts have been predicting growth in the mobile payments sector. While the core idea is elegantly simple — you use a smartphone app to pay for purchases, often by merely waving your phone near a checkout register — the industry has struggled to gain widespread acceptance.
That began to change in 2015 with Apple’s rollout of the Apple Pay system. Now, a host of companies are looking to get in on the action. Walmart, for instance, recently introduced Walmart Pay. And Google is testing Hands Free, an app that would let users make purchases without ever touching a phone or a point-of-sale terminal. And the continued global growth of e-commerce is only contributing to the cashless trend.
Electronic transactions, of course, are not new. But mobile technology is taking e-payments into a brave new era. In mid-2015, a study released by Mobile Ecosystem Forum reported that 69 percent of mobile device users worldwide carried out a mobile banking activity in 2015. In Indonesia, the figure was 80 percent; in Kenya, it was 93 percent.
The movement has also gained traction in the Nordic countries. According to Reuters, nearly a third of the Danish population uses MobilePay, a smartphone application for transferring money to other phones and shops. Sweden, Denmark and Finland lead Europe in credit card payments per inhabitant. And the Danish government has been pushing to allow clothing stores, gas stations and restaurants to no longer be legally required to accept cash.
Similar — and perhaps even more innovative — changes are taking place in the developing world. For instance, farmers in Zimbabwe can insure their crops against drought or excessive rainfall through EcoFarmer, an insurance service offered by Econet Wireless Zimbabwe, which lets them pay back the $10 premium for the season using EcoCash mobile money. In Bangladesh, customers of bKash Limited can earn interest of up to 4 percent a year on savings they accumulate on mobile money accounts.
Visions of a cash-free world are not all utopian. Consumers are well aware of data breaches that have put their credit card information at risk. Those cybersecurity worries may well transfer to the payments by mobile phone. And there are still large parts of the U.S. and the world where sluggish bandwidth slows or even prevents the possibility of mobile transactions.
While a truly cashless society won’t happen anytime soon, the early signs are in place. In particular, younger people don’t want to be slowed down worrying about whether they have enough cash or even the right kind of cash. Consider the case of millennials. A 2015 J. Walter Thompson study found that 44 percent of them prefer to use their phones instead of cash to pay for small items, and that 62 percent are willing to connect their payment information to retailer apps. In other words, why shouldn’t “money” — in the form of bits and pixels rather than dollars and cents — be just as mobile as they are?