Although it may be too early to claim that cash is going the way of the dodo bird, a new report from MasterCard suggests that many countries throughout the world are slowly transitioning to cashless societies due to the convenience of mobile payments.
The report, proctored by MasterCard and called "Cashless Journey," looked at the use of paper money in countries across the world. It's no secret that credit and debit card transactions have been on the rise for the past decade, but now mobile payments are gaining prominence which has reduced the need for cash among many consumers. For example, MasterCard found that 90 percent of the money spent in Canada takes place via mobile, credit and debit transactions. The financial services company also ranked Canada as the nation most ready for a move toward an economy completely without cash transactions.
"Canadian consumers and businesses alike are showing an increased desire for transactions not involving cash," Parry Rosenberg, vice president of sales and marketing at MONEXgroup, told MobileMarketingWatch. "From multimillion dollar corporations all the way down to local businesses, the ability to process credit and debit transactions is a must in today's retail economy."
People are always looking for convenience when it comes to making purchases. This is the reason credit and debit card usage rose while checks declined over the past few decades – for many people, writing a check can be a hassle and a time-consuming part of the purchasing process. Mobile payments play right into that habit. As more businesses begin accepting mobile payments, consumers won't even need to carry their wallets with them – they can simply grab their phones out of their pockets and swipe to pay.
Adding value to the payment process
Convenience will be one critical factor driving more people to use mobile payments, but that's not the only thing the payment type has going for it. After all, simply swiping a credit card is just as easy for many people.
However, savvy brands will connect their mobile payment systems to their mobile consumer engagement and reward programs, allowing buyers to quickly earn points when making a purchase. These points can be redeemed for whatever businesses want and if they select the right rewards, they can add a lot of value to the overall customer experience. Entrepreneurs could stick with something that is proven effective, such as offering flat discounts and dollars off customers' next orders. Enterprises may also want to try something unique, such as letting customers design a product or have one named after them if they collect enough points.
Because loyalty programs and payments apps both reside on mobile devices, businesses can easily connect the two in a way that separates the payment method from others such as cash and credit. This provides customers with real value and an actual incentive for paying with their mobile devices.