Mobile payments unlikely to dent demand for cash - ATMIA
17 August 2015 | 9572 views | 3
A new report from the ATM Industry Association (ATMIA) suggests that mobile payments are unlikely to make a dent in consumer demand for cash over the next five years, instead stealing market share from other non-cash alternatives such as debit, credit, gift and prepaid cards.
An unashamed champion of cash payments, the ATMIA commissioned consulting firm Tremont Capital Group to conduct broad-based research across all segments of the retail payments ecosystem in the USA.
While the study found that mobile payments from the likes of Apple and Starbucks are catching on to some extent, uptake still remains limited, with market share shift coming from electronic payments as opposed to the cash-stuffed consumer wallet.
“An analysis of 30 countries during the five year period 2009-2013 showed an average year-on-year increase over this period of cash in circulation of 8.9%, compared to economic growth rates below 3%,” comments Mike Lee, CEO of ATMIA. “In truth, cash use is more robust and mobile payments less stellar in growth than current conventional wisdom might suggest.”
Taken from the perspective of the USA, this analysis might appear sound. In markets such as the UK, where contactless chip-based payments are becoming mainstream, the card in your wallet - or on your mobile - is proving a popular substitute for loose-change at the checkout.
Recent data from the UK's Halifax shows that nearly 85% of all current account transactions made by its customers are now electronic as contactless technology gains traction, online and mobile banking become ubiquitous and 'pay a contact' services such as Paym emerge.
And according to figures from the Payment Council released in May, electronic payments overtook cash payments for the first time in 2014, signalling the beginning of an irreversible shift away from notes and coins to alternative form-factors.