25th August 2015 Alice Turner

Apple Pay: The end of Cash?

Is Apple pay the end of paying with cash?

Not satisfied with being responsible for one of the best Iphones on the market, Apple launched Apple Pay earlier this year; it’s innovative mobile payment method. So, is this the end of cash payments for good?

If you flipped back even five years it would seem unimaginable to think that one day you could pay in store for a loaf of bread using a mobile phone, but, you can. Apple pay was launched in the UK in July 2015 to more than 250 000 payment terminals and that figure is now rising as more and more banks and businesses get on board with Apple’s Pay revolution.

How does it work?

Using a Near Field Communication Antenna the Apple Iphone 6 can authorise payments simply by being held close to a contactless card payment terminal. Using touch ID you authorise payment with your fingertip and receive a subtle vibration or beep to let you know payment gone through successfully. There’s even an Apple Watch offering the same function whereby you simply press a side button and use the touch ID to pay –  James Bond, eat your heart out. Macworld.com has published this comprehensive guide to using Apple Pay where they list yet another 23 US banks on board with the system as well as details on how and where to pay with Apple.

Apple Pay is an incredible advance for the use of mobile phone payment transactions and could mean you never need to use your old faithful wallet again. Especially as Paypal tap and go also promise their contactless payment readers will become even easier to use on even the most basic android phone in store.

So, what does this mean for the future of cash payments for the consumer?

Well, for starters, not all businesses have the contactless payment terminal installed yet, and if they do use contactless card payments they are often reserved for purchases under a certain amount; where you might normally pay cash. That said, according to this recent article in the Guardian newspaper, card payments have marginally overtaken cash payments. According to the Payment Council, cash payments now make up only 48% of transactions by businesses and consumers. This is perhaps only a small difference in percentage overall but nonetheless a significant one.

According to the European Payments Council, their latest poll suggests that instant and mobile payments are key factors in the future of customer spending habits.

These developments contribute to the expectation for a faster, potentially real-time, finality and/or confirmation of payment. It is, therefore, inescapable that both instant and mobile payments will become an increasingly important part of the payment landscape in Europe.  

That said, according to this article on 9to5mac.com there was some doubt as to whether UK banks would be so enthusiastic about mobile payment with Apple as they have been in the US. So, with more and more people now owning an android or an Iphone who are therefore likely to try mobile payments at some point in the future, who still pays in cash? Well, this article by frbsf.com about cash payments says,

Cash plays a dominant role for small-value transactions, is the leading payment instrument for many types of purchases, and stands as the key alternative when other options are not available. 

It goes on to say that there are some age groups, namely the 18-24 yr bracket, that actually prefer to use cash as a means for paying for smaller amounts. Families on low income and those over 70 may have more basic banking facilities and therefore may also favour cash payments over payment methods that involve more sophisticated devices. However, speaking here to techradar.com, Mike Cowan Head of Emerging Payments Product for MasterCard UK & Ireland says,

We effectively standardised contactless in Europe – and from January 1 2016 all new terminals have to accept contactless. And from 2020 all terminals should have contactless.

So, contactless payment should become more readily available over the next five years or so. But, while the advances in payment technology are exciting for the Tech Industry, we won’t all be giving up our coin wallets just yet. So what’s next for the Tech world and mobile banking?

Let us know in the comments what you think is next in mobile banking!

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About the Author

Alice Turner Events Manager at Runway East

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