Wednesdays without Will: Cash isn’t King

Ever step inside a coffee shop or retail store, order something and then realize you have no cash? Not a problem; you pull out your credit card or debit card and swipe. It’s an easy, painless transaction. Now have you ever been to a small boutique, a food truck or been with an on-call service (i.e. plumbing, electricity, contractor, etc.) and realize you have no cash? In the past, this was a problem, but luckily this scenario is no longer a concern because mobile card readers now exist.

Mobile card readers, to clarify, have been around for the past few years. The difference, however, is the fact that now more than ever, small-businesses are accepting credit cards when they couldn’t in the past. Why the influx of credit carrying businesses? Simple—people carry less cash and use their cards more. According to TheCreditExaminer, there are over 180 million credit card holders in the U.S., with 66% of in-store transactions made with credit, debit and pre-paid cards. Likewise, cash point-of-sale purchases are expected to drop from 27% to 23% by 2017, and credit card point-of-sale purchases are expected to grow from 29% to 33% by 2017.

Mobile credit card readers are developing at a rapid pace. Popular readers like Square, Intuit GoPayment, PayAnywhere and Paypal all have headphone jack plug-in credit card readers. The cost for these readers? Free. These companies provide free software, apps and readers. The only fee typically associated with these products is a swipe fee and/or a small monthly payment.

So should Americans expect to see more mobile card readers, and should Americans expect a decrease in the use of cash? Yes and yes. In fact, as credit and debit cards are becoming more widely used, using physical cash will continue to diminish. However, as mobile technology improves, so will our traditional methods of payment.

To say the least, the future of payment may no longer have a plastic card.

The technology already exists and is already in use in the U.S., but consumers are still far behind the technology. Several companies (including Google, Mastercard, Visa, Square and even Starbucks) offer some form of a “digital wallet,” which allows consumers to pay with their phones. Ultimately, these wallets store debit and credit account information which then is used with a wave of the phone, checking in with a self-photo or simply through a QR code. The different methods used by these companies will be the reason it will take time before anything like this will become mainstream and widely accepted. Until then, it’s safe to say credit cards will still be relevant in the near future, but don’t expect it for long.

Unfortunately, it doesn’t end with the phone. What do you think of paying bills with your face?

 

 

Cover Photo Source: Yeko Photo Studio

Kevin is a Junior Executive at SJG. He is currently working towards a degree in Advertising and a minor in Spanish at the University of Illinois at Urbana-Champaign. Outside the office, you can be sure he’s commuting back and forth to Champaign for other work with his radio station at school.