Towards a cashless society?
Steve Perry, executive vice president of Visa Europe, recently gave an interview to The Telegraph, in which he admits notes and coins are never going to be fully replaced. However, the secure transactions industry is doing its best to reduce the share of cash based transactions. "The European Commission has calculated that the total cost to society of all payment methods including cash, checks and payment cards equates to 2% to 3% of GDP," the report states. “To put this figure into context, it should be remembered that the entire EU agricultural sector equates to 2.1% of GDP, which means we spend more on payment than we produce on food,” said Steve Perry.
Card payments represent an increasing share: in the EU, according to the European Central Bank, EUR 1.68 trillion was spent on cards in 2008 and use has been growing at 12% a year for the past five years. The advent of contactless payment means MasterCard PayPass and Visa payWave clearly targets small amounts where cash is still dominant. Generalization of NFC will be the next step in converting payments from cash to electronic transactions.
Many announcements show the trend is towards a reduction if not a total disappearing of cash. There are always more credit and debit cards on the field, contactless cards are representing increasing volumes, and international mobile money projects go into the same direction. Another step has just been announced: the British Payment Council Board has just announced it would abolish checks by 2018.
Smart Insights Weekly