Will cash and credit be replaced by mobile payments in 2020?

Will our smartphones take the place of cash and credit in the next ten years? According to a study by “Pew Internet & American Life“, it’s estimated mobile payments will be so mainstream in 2020 they could take the place of the methods we use to pay today. It sounds crazy, but ten years ago did you really think you’d be checking your email while you walk down the street? Technology is moving at lightening speed and who knows what we’ll be using next.

Pew studies show more than a third of smartphone owners use their phones for online banking services like checking an account balance or paying bills.  It’s not just smartphone banking. Research from comScore showed 38% of smartphone users bought e-books, movies, music, clothing, tickets, or daily deals with their mobile device. With services like Google Wallet, you can even pay for certain purchases by just swiping your smartphone instead of cash or credit. Your phone acts like a wallet. More virtual payments systems are in the works.

Personally, I am not a fan of mobile payments. I think the technology is too new and there are still security issues. Checking my email, Facebook, and Twitter on my phone is enough of a security risk for me.

Supporters of mobile payment systems say they are simpler, more convenient, and enhance your shopping experience offering you recommendations and special deals based on your location and previous purchases. I’m not comfortable at this time with the security features to make the switch. The benefits simply don’t outweigh the risks. I already worry about losing my costly phone. I can only imagine my worry if I knew my credit card number was somewhere hidden inside. Even if it was securely contained, I’d still worry.

The question is — will my attitude change by 2020? 65% of the experts surveyed by Pew said most people will be fully using their smartphone for purchases instead of cash and credit by the year 2020. Only 33% thought people would not trust the technology and not use the mobile payment technology.

It will take a lot to get me to make the switch. Pew said the experts it consulted believe the transition will develop generationally with younger smartphone users using mobile systems before older generations. It will be just like computers. The majority of older generations have no interest or use for a computer. I’m in the middle, and it will take a lot of convincing.

Some of the experts said it’s realistic that we’ll make this switch by 2020 because we’ve already moved to digital currency with credit and debit cards instead of cash. That’s a good point, however, a lot of security questions will need to be addressed in eight years. That is an eternity in the technology world, so we’ll see.

Microsoft’s principal researcher, Jonathan Grudin, pointed out that there has to be a financial stake for companies to invest in this technology and infrastructure.

“The driver here will virtually 100% be whether or not the credit card industry decides it can make more money through changing technologies,” Grudin said.

Will we see new fees associated with this technology? There’s already a fee to use a credit or debit card. Businesses pay the charge, but indirectly pass it on to us by factoring it into the cost of products. Some businesses are so fed up with the interchange fees they only accept cash or offer a cash discount.

There is a lot of work that needs to be done on infrastructure and logistics before I’m convinced. One anonymous expert raised the question about battery life. What happens when your cell phone dies? Essentially you can’t buy any more purchases. Maybe it will keep people out of credit card debt. All joking aside, that’s a huge issue. Batteries simply don’t last that long.

As I look back on the past decade, which is my career plus two years, the phones we used back then were huge and often immobile. They were these clunky devices that were permanently fixed in our news car. Now, we walk around and talk, text, and surf on a device that fits in the palm of our hand. We posted news stories on the web, but the Internet was not a huge driver of news like it is today. We got emails, but that was the extent of our viral interaction with viewers. Today, mobile devices are a new platform for television. Facebook and Twitter also drive our news. I never thought the business I got into 12 years ago would be what it is today. In my view, anything is possible in the next ten years. Who knows what my new habits will be — maybe I will be swiping my phone to pay for my purchase.

What do you think will happen in the next decade? Click “comment” and predict the future.

Comments are closed.