Cashless Society and Mobile Payments

Assistant Professor Niklas Arvidsson at Industrial dynamics department at KTH is running a project on Cashless society. The main objective is identify and describe the potential consequences of “cashless-ness” for consumers, merchants, public transportation, banks, payment providers, mobile operators, etc.

Within this project a number of workshops have been organized. One workshop was run March 13 with focus on merchants and the hotel and restaurant sector and another one March 15 with participants from the financial sector. Some of the interesting findings from the workshops are:

• For the Swedish market it was clear that the workshop participants believe that it will take many decades before cash is replaced at a 90% or 95 % level.
• Mobile payments should primarily be discussed in terms of how agreements are established with merchants and how the payment solutions are integrated with consumer’s bank and credit cards accounts. Now there is a trend to focus on contactless technology, use of QR codes, availability of NFC phones, security solutions, and location of secure elements.
• A strong driver for making mobile payments to happen can probably be to use the mobile phone as a “market channel” to the consumer. Payment services and value added services can be integrated.

The last item supports the main idea of the proposed KTH research project “Mobile payments – Not only transactions” with focus on services and different forms of value added before and after the actual moment of the purchase and transaction.

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5 Responses to Cashless Society and Mobile Payments

  1. John Candido says:

    There is no stopping the evolution to a cashless
    society.  It will be a convergence of the
    internet, smart cards such as Visa PayWave & MasterCard PayPass, and a
    smart phone that can be used much the same way as a credit card with PayWave
    & PayPass.  This will be the final
    nail in the coffin for cash.  Our smart
    phones will contain every debit and credit card we own, as well as all of our
    discount vouchers and receipts in digital form. 
    No more bits of paper to carry in our wallets.  Google with MasterCard will produce a Google
    wallet, Visa will have an e-wallet, and PayPass will offer a similar product as
    well.  These are called virtual
    wallets.   

    What I think will happen is that we will have a de facto
    cashless society first, where a majority of transactions will be done without
    cash, both in numbers of transactions and in the quantity of money
    involved.  We will probably have a de
    facto cashless society in about 5 years. 
    After a period of a further 30 to 40 years, or somewhere thereabouts,
    cash will be eliminated from our economy after the nation has had a debate
    about this issue. 

    It will be extraordinarily convenient not to have to ask for
    and carry any more paper receipts or physical discount vouchers!  How incredible, powerful, and efficient will
    both Visa’s, PayPass’s, and Google’s e-wallets be, once they become
    commonplace?  The question is whether or
    not the banking system can adapt and catch-up? 

       I am absolutely confident that we are on the
    verge of a tipping point regarding the eventual elimination of cash from our
    economy.  As long as there is a national
    regime of privacy legislation and the security and integrity of the internet is
    assured, powerful institutions such as state and federal governments will seek
    and obtain taxes in full in future, as well as not have to bear the cost of
    printing and manufacturing cash. 

    Police and intelligence agencies will advocate a cashless
    society in order to limit or prevent crimes associated with cash.  Cash always provides criminal anonymity as in
    the drug trade, terrorism, burglaries, organised crime, and cash thefts.  The crime of counterfeiting money will be
    completely eliminated.     

    Banks and most businesses will want a cashless society
    because it will substantially lower their costs, by not having to deal with
    cash on a daily basis.  No more counting,
    storing, or transporting cash will mean both safer banks and businesses, and
    lower cost overheads.  A cashless society
    will be evolutionary, convenient, and unstoppable.  It will provide many social and economic
    advantages, relative to a society that maintains cash.     

  2. CemileSertdemir says:

    Hey John..

    Interesting comment. 
    What do you think would me the downsides for the consumers? 

    • John Candido says:

      I don’t see any downsides to a cashless society in the
      long-term.  Technological developments
      will cater to the needs of people who are visually impaired, intellectually
      disabled, or the elderly.  What I mean by
      the elderly will be people from my own generation; the baby boomers.  I am in my middle 50s. 

      One important task for app developers will be to create an
      app that will mimic the cash effect. 
      What I mean by that it is easy keeping tabs on your spending when you
      are using cash.  An app will be developed
      that will create the same or similar experience of using cash.  I figure that it will have budgetary
      functions, and keeping tabs on your credit card spending by journaling them all,
      so you have a cumulative debt figure whenever you want one.      

  3. krisuk says:

    The cashless society will also mean the end of personal financial privacy for the ordinary person, since every one of his transactions will be available for tracing, tracking, viewing and no doubt data-mining. It gives governments and banks utter totalitarian control over the citizens; although sadly the citizens are stupidly lapping it up and will not realise their fate until the grid snaps shut.
    It will mean the end of jumble sales, car boot fairs, village hall sales, local art and craft shows, children’s pocket money, donation tins, single traders…. you finish the list.
    As for mobile phones, stuff em. I dont own one and won’t be buying one anytime soon. I’ve just chopped up my MBNA RFID card and told the company to shove it where the sun doesnt shine.
    Oh yes……just wait for the effects of power failures. All it needs is a real good un to take out the Internet and card readers, while sunstorms zap out the microchips in the phones. Cash is going to look a pretty good deal in such times.

    • txgwQMde6yT3o2wUQuT9 says:

      There must be a national privacy regime in tandem with a
      cashless society because privacy is a very important issue.  You can opt out of reward programs if you
      wish, thereby stoping the tracking and recording of all of your purchases in
      the particular business’s stores.  This is
      not a system of ‘utter totalitarian control’ and to say this is simply grossly
      overstating the case. 

      It will not mean the end of jumble sales, car boot fairs,
      village hall sales, local art and craft shows, children’s pocket money,
      donation tins, and single traders.  Mobile
      Eftpos units and mobile phone technology will adequately cater for all of these
      circumstances. 

      When there is a power failure there are things such as
      emergency backup power and the manual paper recording of both credit and debit
      card transactions.      

      By the way, the above username is John Candido.

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