TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      Fixing SA’s power crisis is not complex: it simply takes the will to do better

      12 August 2022

      Consortium makes unsolicited bid for state’s 40% stake in Telkom

      12 August 2022

      Actually, solar users should pay more to access the grid – here’s why

      12 August 2022

      Telkom says MTN talks remain on track

      12 August 2022

      Analysis | Rain muddies the waters with approach to Telkom

      11 August 2022
    • World

      Tencent woes mount, even after $560-billion selloff

      12 August 2022

      Huawei just booked its first sales rise since US blacklisting

      12 August 2022

      Apple remains upbeat about iPhone sales even as Android world suffers

      12 August 2022

      Ether at two-month high as upgrade to blockchain passes major test

      12 August 2022

      Gaming industry’s fortunes fade as pandemic ends

      11 August 2022
    • In-depth

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022
    • Podcasts

      Qush on infosec: why prevention is always better than cure

      11 August 2022

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022
    • Opinion

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»In-depth»Around the world in 80 payments

    Around the world in 80 payments

    In-depth By The Conversation11 January 2016
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    M-Pesa has been launched in a number of African markets, but remains most popular in Kenya
    M-Pesa has been launched in a number of African markets, but remains most popular in Kenya

    Ever since computers were first introduced into the retail banking system in the late 1950s, there has been the vision of a future world where cash is obsolete. The near death of personal cheques, increase in debit and credit card use, and innovations such as PayPal, Square, Apple Pay and bitcoin, have led us to believe the cashless society is well within our reach.

    But data from Retail Banking Research, one of the most authoritative sources in the area, suggests that even though cashless payments are growing rapidly across the world, hard currency remains resilient. This trend was corroborated by a study commissioned by the ATM Industry Association of a panel of 13 countries. It suggested that global demand for cash grew by 4,5% between 2009 and 2013 (when the latest figures were available).

    So, 50 years into the journey and we are still not there yet. However, a number of innovations have taken place around the world. Here’s how different continents stack up.

    Europe
    One in 10 card payments were contactless for the first time in 2015 in the UK. By making small payments easier and quicker, contactless marks a major threat to cash. London is also fast becoming the world’s fintech capital, despite having substantially fewer resources available for investment than the US.

    Next summer, Copenhagen will host Money 20/20, the world’s major annual event for emerging payment technology. It will be the first time the forum convenes outside the US, bearing witness to the increasing importance of Europe when it comes to innovation in payments and financial technology. In countries like the Netherlands, there are cafes and even supermarkets that no longer accept cash.

    Many have pointed to the slow death of cash in Scandinavia, but cash is unlikely to completely die out — few may develop a mobile app suited to the needs of refugee migrants there, for example.

    North America
    Despite playing host to the world’s top technology firms and research centres, the US lags behind when it comes to implementing some of this tech. Chip-and-pin payment cards were only launched in October 2015 and do not seem to have done well over the Christmas holiday season, with reports of large retailers bypassing card readers and going back to signatures. This might seem backward but it’s important to remember that chip-and-pin cards are as much a protocol to determine who will bear the cost of fraud as a security feature.

    And, while the US has been slow to introduce chip and pin, there have been developments in smartphone payments. The bank JP Morgan Chase and retailer Walmart have both launched rivals to Apple Pay, which shows how retailers, banks and regulators are innovating to bring about faster payments and a potential cashless society.

    Africa and the Middle East
    The success of the mobile payments system M-Pesa in increasing financial inclusion in Kenya is well known, with the majority of the population able to transfer money using their phones, despite not having a bank account. And there has been similar growth of mobile payments in Botswana and South Africa. But the jury is out regarding the Cash-less Nigeria Project by its central bank, which aims to reduce the amount of physical cash circulating in the economy.

    Africa and the Middle East remain the areas with the lowest global numbers of adults with a bank account while Middle East and North Africa countries (as well as China and other Asia Pacific nations) have been and will continue to be the worlds’ growth markets for ATM manufacturers. This suggests the high use of banknotes in the everyday life of people in these regions.

    Asia, Latin America and Oceania
    In China, the mobile app WeChat is one to watch. WeChat, part of digital behemoth Tencent, part-owned by South Africa’s Naspers, has grown from its original service as a messaging app in 2011 to include taxi-hailing, food-ordering and money transfers. WeChat ranks as China’s most popular app with 650m users and is used to send both renminbi and cryptocurrencies like bitcoin between users.

    Technology as a promoter of financial inclusion is the name of the game in poor economies where the bottom third of the population hardly have any access to the financial sector and mobile money is seen as the potential solution. Chile is a notable example of successful government initiatives in this direction. But the one to watch is the Indian government’s drive to replace money with mobile payments on top of a growing private network made up of 140 000 private business and public sector bank correspondents.

    Cash is still king in most markets
    Cash is still king in most markets

    The challenge for mobile money, however, is that it sits at the intersection of finance and telecoms and so faces regulations from both. On top of that, India and other countries in Asia and Latin America have a significant number of transactions that take place outside the formal financial sector and, typically, an over-regulated telecoms sector. At the same time, those at the “bottom of the pyramid” are fearful of and distrust established financial institutions.

    Australia offers a much brighter outlook. The introduction of contactless payment cards in 2010 has proven hugely successful and as a result plastic has significantly eroded the use of cash and ATMs. Indeed, a recent study by the Reserve Bank of Australia found that the use of banknotes and coins fell from 69% in 2007 to just 47% in 2013. That decline took place across all age and income groups, with people in rural locations more likely to be using cash than those in major cities.

    While some countries have embraced mostly electronic forms of payment, this does not mean that others still using banknotes and coins are less efficient or backward as some might seem to think. Differences between countries and between rich and poor within them remain partly due to custom, culture and regulation. But also because new technology has failed to make its case to users.

    There is more innovative technology looking for a market than consumers looking for alternative ways to pay. And there is nothing wrong with existing forms of payment — they, and cash in particular, work well in most countries, for most consumers, 99% of the time. Of course, people change their habits and financial technology start-ups may one day disrupt the status quo.The Conversation

    Bernardo Batiz-Lazo is professor of business history and bank management, Bangor University; Leonidas Efthymiou is lecturer in management and strategy, Intercollege Larnaca; and Sophia Michael is languages department coordinator an lecturer of English, Intercollege Larnaca

    This article was originally published on The Conversation

    Apple Apple Pay Bitcoin M-Pesa PayPal Safaricom Square
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleFacebook’s Free Basics is no charity
    Next Article Backspace: ‘Not following’

    Related Posts

    Apple remains upbeat about iPhone sales even as Android world suffers

    12 August 2022

    African unicorn Flutterwave battles fires on multiple fronts

    11 August 2022

    Samsung unveils its latest foldable smartphones

    10 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    Get your brand in front of TechCentral’s amazing audience

    12 August 2022

    Pricing Beyond CMYK: printers answer the FAQs

    11 August 2022

    How secure is your cloud?

    10 August 2022
    Opinion

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.