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lead: “The existing payments system isn’t broken, which is why consumers are not making a mass-move to mobile phone payments adoption – the incentives are not there yet. Today’s mobile phone payments options provide basic, first-generation functionality; it’s like running an Atari game on an Xbox system – amazing underlying potential, but only providing a very basic offering. Consumers expect more in today’s fast-paced digital environment; just the ability to tap-and-pay is not enough. Payments providers need to bring the traditional card to life and create a real-time interactive experience for consumers.”
Cash still King
Albert Einstein said, “the definition of insanity is doing the same thing over and over and expecting different results.” Someone should pass this nugget of wisdom onto the banks and card schemes who for the past few years have been predicting the imminent demise of cash in the face of a brave new digital world. 2015 is the year that contactless will get over with the man and woman in the street and then physical money is done for. No, wait, 2016 is…And so on.
The war on notes and coins continued apace this year. Following India’s surprise move to scrap its highest denomination notes during November, UBS said that eliminating Australia’s $100 and $50 bills would be “good for the economy and good for the banks.” Also Down Under, Citibank announced that it was going cashless at some of its branches. Whilst in the November issue of IBS Journal, Jurgen Vroegh, Global Head of Payments, Products and Channels at ING Bank, commented: “Cash is dirty. You don’t want to know what’s been on or around your notes, especially the US dollar bill. Not to mention coins which are even dirtier than bank notes. In the Netherlands, we have more non-cash transactions than cash…Retailers are pushing consumers to pay with their credit or debit card to lower the amount of cash they need to handle because it’s much cheaper. Eventually we will end up with counters at supermarkets where you can pay by cash – the rest will be by card or contactless.”
Nonetheless, cash usage remains resilient in the face of increased uptake of cards and mobile. China and
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The UK is dominating the challenger bank sector, boasting way more new entrants than any other country. Notable developments this year included mobile-only venture, Atom, officially opening to all customers. It was founded by Mark Mullen, former CEO of first direct and Anthony Thomson, who created Metro Bank, and had previously been in “invitation only” mode, with its iPhone and Android app available to customers who had expressed interest and been given a registration code.
Atom’s products currently include two fixed saver accounts and SME lending through intermediaries, while business banking is being rolled out. “We are creating an entirely new way to bank; a system that is based on what the customer needs and wants, rather than being focused on bank balance sheets,” said Mullen.
Elsewhere, Tandem rolled out its mobile banking app to 10,000 early adopters (see News section for more info on this), Starling received a restricted UK banking licence and announced Faster Payments adoption. It is set to
India will be responsible for the majority of growth in the global ATM market over the next few years as vast numbers of people open bank accounts for the first time. Four million ATMs will be installed worldwide by 2021, according to RBR. Although the likes of China and India are seeing the greatest rate of expansion, in most established markets, such as western Europe and North America, the number of terminals and the number of cash withdrawals is still increasing.
Just deal with it, drop the ‘RIP cash’ rhetoric and move on to a more sensible, balanced debate, Mastercard, Visa, Worldpay, Barclays et al.
Good year for the challengers
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