Soon, Tech Could Make Cash and Credit Cards Utterly Obsolete
Traditional currency may be on its way out.
A New Way to Pay
A variety of new payment methods, processors, and banking tools that use smartphones will revolutionize the way we use money — particularly for small businesses and developing countries. Polish futurist Piotr Turek stated in an interview with Thomas Frey that, “in less than five years, smartphones, watches, and other devices will replace credit/debit cards, wallets, lenders, stockbrokers, and insurance agents.”
So, what technologies and enterprises are acting as a catalyst to a cashless, cardless society? Sumsung Pay, Apple Pay, and Google Pay — to name a few. Numerous technology giants are launching mobile payment and banking applications that only require the user to have a smartphone to pay for products. Start-ups, which include B, Starling, and Monzo (which raised £1 Million in 96 seconds in its crowdfund during March, 2016) have also had success in the sector.
These ventures are booming most in developing countries, in which banking is difficult due to a lack of physical banks. A 2016 report by the Global Economic Governance Program found that nine of the 10 top mobile banking companies were in Africa. But these technologies and businesses could have a big impact on first-world economies as well.
Mobile points of sale are replacing the need for cash registers. Examples include Square and Shopkeep, which reduce the start-up costs for businesses. These can be integrated with other apps to provide small businesses with management, project planning, and payment tools, greatly decreasing the cost and learning curve for small business owners.
The use of these mobile banking tools makes managing finances: quicker, because there is no need to go through banks and money transfers are often instantaneous; easier, because app’s interfaces are designed to be as simple as possible; and more secure, because there are no physical cards and money to steal, and even if a phone is stolen, one cannot access money without a passcode.
As more and more of the mobile banking and payment solutions integrate into blockchain cryptocurrencies (purely digital currencies), security and speed will increase even more. IBM has stated that 15 percent of big banks will be using blockchain by the end of 2017, and the fact that many major banks have recently joined the R3 blockchain gives testament to this prediction. The popularity of bitcoin is reflected in its ever increasing exchange rate.
An interesting potential consequence of payment being conducted over blockchain more and more could be a universal global currency, as blockchain is capable of functioning using only cryptocurrencies. As Turek said in the interview, “There is a good chance that we will have a default global currency arise from the cryptocurrency movement.”