Why Mobile Phones may Eventually Replace Cash

Mobile has been steadily rising in use and has changed the dynamics of how people communicate and do business.

Already, the movement towards mobile has transformed how society across the globe operates, and it is now being kicked up a level. As smartphones increase in popularity, trends are shifting once again.

People are now constantly connected and the technologies built into these devices are adding more possibilities than with traditional mobile phones.

M-commerce has long been on the rise, and research analysts are projecting a huge boom over the next couple of years.

In Sept. 2010 Mashable reported, “Globally, consumers are expected to spend $119 billion by 2015 through their mobile phones, accounting for about 8% of all e-commerce activity, according to ABI Research” and ” The total value of mobile payments around the world will quadruple from $170 billion in 2010 to $630 billion in 2014, according to Juniper Research.”

With the anticipated growth of the very convenient mobile commerce, it seems natural progression that a simplified and convenient way to make payment would also evolve.

Enter mobile payments.

Methods of mobile payment have been evolving, with the concept of e-wallets, it seems this is the future, as the newest method of replacing cash arises. The problem is a lot of security, conversions and compatibility issues need to be addressed

According to the Guardian, Barclaycard plans to launch a stick-on credit card as a solution. This method will allow the bank’s 12 million customers to simply wave-and-pay with their mobile phone when making a purchase. The stick-on is linked to the individual’s credit card and will allow payments to be made without dealing with swipes and signatures.

The bank plans to roll out this product in May 2012.

David Chan, CEO of Barclaycard Consumer Europe, said: “More than half of us say that the item we’re most lost without is our mobile phone, so we’re giving people the option of using them to make easy, convenient, everyday payments without the need to upgrade their current handset.”

Online giant eBay, which owns PayPal, is also embracing mobile payments, reported Sky News.  “PayPal mobile payment volumes continue to be on fire,” CEO John Donahoe said. “We see enormous opportunity for PayPal online, on mobile devices and increasingly, in the offline environment as well.”

Society has long embraced convenience and with using a one-device-fits-all approach, using plastic and electronic methods to replace money appears to be the new generation of an increasingly cashless society. In modern society, convenience usually trumps all.

Retailers recognize this and many are beginning to offer contactless payments, including fast-food giant McDonald’s. There is also a benefit to businesses as contactless payments allow faster processing and keep lines moving.

BBC News reported Japan has been making provisions for contactless mobile payment in commerce since 2004.