By Damon Darlin
This article talks about the revolutionary Apple pay system. Apple pay is a mobile payment and digital wallet service by Apple Inc. that lets users make payments using iPhone 6, iPhone 6 Plus, Apple Watch-compatible devices (iPhone 5 and later models), iPad Air 2, and iPad mini 3. The reason Apple pay is as popular as it is is because its supposed to replace the burden of carrying a wallet full of credit cards and receipts and cancel the risk of losing or forgetting the wallet.
According to this article, Citibank carried out a survey asking what method of payment is used for smaller purchases. Nearly half of the people in their 50's said cash. But among those under 30? just 30% said they'd use cash. The millennials preferred to use debit cards; about 40% said it was the preferred option. Only a quarter of those over 60 said they'd use a debit card.
Analysts at Forrester Research estimate the in-person mobile payments will reach $34 billion in annual transactions before the end of the decade, from $3.7 billion this year. Meanwhile, in-person mobile payments are a quarter of 1% of retail sales. But with a compound annual growth rate of 56%, they would be the fastest-growing segment of mobile payments. The introduction of credit cards with computer chips on them, a security enhancement common in Europe, will cause retailers to upgrade their checkout systems. Many will buy ones that enable smartphone payments.
What would a cashless society do to the economy?
I was surprised to hear that Apple Pay proved a real bust on Black Friday. More than 95% of iPhone 6 users who could have paid with Apple Pay on Black Friday did not do so. Furthermore, five weeks after its initial launch, more than 90% of users hadn’t even given the payment method a try. It will be interesting to see how Apple Pay performs in the long-run.
ReplyDeleteIt will be interesting to see what percentage of the market will use Apple Pay in a year from now and several years down the road. I think it will be a long time before cash and the credit card are eliminated from transactions, if ever. It is not too surprising that the Apple Pay was not too popular during Black Friday because it is a relatively new invention and consumers may not feel confident using it, or instinctively pay with other methods. Over time, I believe Apple Pay will be a success.
ReplyDeleteIt's interesting to see how there is such a difference between generations for how they prefer to pay for lower amounts. I know that I personally prefer to use a debit card, and I have noticed that my friends do the same as well. Very rarely do I see cash being used. I think that stores are going to have to enhance their security systems in order to keep track of how people are going to be paying, in order to get as many customers as they can.
ReplyDeleteI don't think it's very surprising that debit cards are preferred by younger generations, as they're generally quicker and easier to use. I'm sure the popularity of online shopping has contributed to the popularity of debit cards as well. It seems hard to imagine a cashless society, but with new innovations like Apple Pay and the increase in debit card usage, it doesn't seem entirely impossible.
ReplyDeleteI doubt the credit card will leave the market completely ever, or at least not for a very long time. Even for cash, 30-40% saying it's the preferred method is still nothing to sneeze at. All in all, I think cash serves a very important function in society that won't easily be replaced, at least entirely, by online banking.
ReplyDeleteI too prefer to use a debit card for purchases. For me it's easier to track and I'm less likely to impulse buy. Online banking and being able to monitor money at the touch of a button is neat as well. One thing I'd be concerned about is an increase in fraud and credit theft, causing a distrust for electronic credit markets. The Fed may need to seriously increase monetary production in a case like that, which could lead to long run problems. Hopefully credit companies beef up online security as this trend of paperless paying continues.
ReplyDeleteWhile credit/debit cards may be preferred, I cannot fathom an entirely cashless society. There will always be people who don't trust cash-free payment methods and certain exceptions where cash is actually easier to use. Thus, cash will always be somewhat relevant.
ReplyDelete