The End Of The Traditional Cash Wallet Is Inevitable
Soon we are going to have to think about another use for your left pocket, because without cash and keys (yes soon house and car keys will be on your phone!) what will your left pocket be used for?
Think about it; even the photos in your phone are just so much better than the ones in your wallet, apart from of course the loved ones who are no longer around to be snapped.
Your phone that does everything will be in your right pocket or your left of you are inherently an evil leftie, whatever, we will soon all have a spare pocket!
One just has to look at China who are leading the way in getting rid of bank notes and coins by going online for payments. In China today cashless payments are so mainstream you get looked at strangely if you want to pay by cash for most things, even an appointment with the Doctor is a scan code to pay, and this technology shift is being enviously looked at by the West!
It makes sense for the end consumer to use QR codes offered by retailers and it makes managing personal finance immeasurably easier. Recently advisers helping students and young people to manage limited cash flow to use debit cards as much as possible because spare cash always used to burn a hole in our pockets, which was an old adage used to describe how feeling the cash in your pocket meant we were more likely to give in to impulse buys. This now gives precedence to QR codes to pay by just scanning the code at the coffee shop or newsagents.
Statistically young people are more likely to forget a pet, friend or parent than their phones, so this is a main factor making it safer and making losing cash a thing of the past.
Governments want cashless payments because printing more cash is expensive and devalues the worth of the notes causing inflation.
It is common fact that because of inflation the ores used in most coins are worth more than the face value so the day when the rest of the world goes 100% online for payments cannot come fast enough for most chancellors.
But why is Europe dragging their heels with paying for things via the mobile phone and online apps?
One reason is Alipay and Tenpay the companies driving online payments utilizing social media are adept in knowing Chinese demographics and that younger people are driving this growth and they are the future. Acuity Research Group expects 60 per cent of all payments in China to be made online by 2020, and verified via biometric sensors.
According to iResearch Consulting Group, which measures online audiences in China, the gross merchandise volume (GMV) of online payments in the country reached 57.7 trillion yuan (HK$69 trillion) in 2016. That includes payments made through computers (19.2 trillion yuan) and mobile devices (38.5 trillion yuan) and amounts to about 50 times the GMV of similar transactions in the United States, which is estimated by market research firm Forrester Research at US$112 billion.
And China growth remains strong, with iResearch reporting that online payments soared in the first quarter of 2017. Mobile payments over the period grew 113.4 per cent, to 22.7 trillion yuan and other online payments reached 6.4 trillion yuan, up 56.1 per cent year on year.
Alipay and Tenpay dominate with 54 per cent and 40 per cent market share of mobile payments, respectively, as well as 30.7 per cent and 22.2 per cent of other online transactions. Payment systems popular elsewhere in the world, such as Apple Pay and PayPal, don’t even warrant a name check in China statistics, and are relegated to the “others” category.
The Chinese economists are also aware that the older generations are at home in the villages and farms have expendable income but they also know that because of family size and the cultural obligation for the younger to help the elders in the family more so than the west, so it is not at all uncommon for Grandson to show granny how to buy things via smartphones when they take them out and to help them all the way to understand the ‘new economy.’
It is karmic to think that the Asian way of the younger members spending more time with family than we do in the West and to take more responsibility to keep the elders living within the family group would actually end up as a main factor for creating a stronger economy.
In the not too distant future facial scans will be available where you can pay for a Pizza by taking a scan of your face. Your Fridge will know when you are running out of milk before you do and milk will be delivered and your fridge will pay, well not exactly, you will pay the fridge in real time. You can even get a robot to manage the buying of shares for you.
Europe markets need to work harder to see the future of payments and I believe the time is now!
If you are serious about managing your own finances personally and more so in business, you need to start managing cash online via mobile applications.