Changing the Way We Pay: How Technology is Slowly Killing Off Cash

Fire” (CC BY 2.0) by Mike Poresky

The way we pay is slowly changing. Where it was once true that cash or checks were king, it’s now become the case that digital payments are becomingly increasingly widespread. Indeed, thanks to innovations in both the online and mobile tech worlds, paying for goods and services is now a lot less physical (you don’t have to hand over cash) and a lot more efficient.

Naturally, while there will always be a place for cash and, moreover, credit and debit card transactions, the traditional is gradually making way for the modern. In fact, according to a report by Payments UK, more countries are now embracing new technology and moving increasingly towards cardless and cashless systems. Indeed, aside from hailing the UK as one of the leaders in payment options and highlighting how it is working with the US Clearing House to help drive its electronic systems, the report suggests that Denmark may soon be cashless.

In recent months, the Danish government has proposed the idea of scrapping the rules regarding cash transactions and retailers. If the plans are accepted, retailers in Denmark would no longer be obligated to accept cash, which would pave the way for new methods to be accepted. While a complete removal of cash payments across Europe or the world at large is unlikely in the next few decades, the technology is there.

As Bitcoin.com has suggested in a recent article on the payment revolution, there are now three main areas of change:

  • Peer to Peer
  • Contactless
  • M-Commerce

Virtual Currency Makes Transactions Slicker and Safer

bitcoin accepted here” (CC BY-SA 2.0) by Francis Storr

Ever since the blueprint for Bitcoin was released in 2009, tech wizards, coders and financial experts have been touting its benefits. By creating a system whereby users create and control a currency which is underpinned by a strict mathematical set of rules, Bitcoin has become something of a “liberated” currency. Although its development has been slower than many expected, it’s now gaining mainstream popularity.

Indeed, with everyone from retailers and online casino sites to pubs accepting Bitcoin, the general public is slowly starting to see its benefits. For example, an online slots fan that antes up at BitcoinPokies.com can now enjoy the added security benefits of Bitcoin when they fund their account. Because each Bitcoin transaction has to be verified by the blockchain there is a high degree of accountability at all stages of the transaction.

For operators like BitcoinPokies this is great because it reduces the risk of chargebacks (common with credit cards), which means transactions are swifter and safer for customers. In fact, a player at BitcoinPokies can enjoy instant withdrawal times (the industry standard is 2-5 days) and, moreover, anonymous transactions.

Mobiles Make Payment Easy

Apple Pay está más cerca de España y” (CC BY-SA 2.0) by iphonedigital

Beyond the ever-growing peer-to-peer payment system, contactless and mobile commerce (m-commerce) is starting to gain some serious traction in the UK and Europe. Contactless debit cards are now a standard in the UK and in 2015 one billion transactions were carried out using this method. This 200% growth was not only down to the spending cap increase from £20 to £30, but because terminals had become more advanced and more widely available.

In addition to the rise of contactless payments using a debit card, banks have also partnered with Apple to facilitate the growth of Apple Pay. Seen as the next phase of contactless payments, Apple Pay users can now link their debit card to their phone and use their mobile screen to complete a payment. Thanks to technology such as fingerprint reading, this method is seen as more secure by many consumers. In fact, with Apple attracting one million new Apple Pay users each week, it’s easy to see why m-commerce is now being seen as the next frontier for payment processors.

With smartphones an integral part of everyday life, it’s not just as easy to use this as it is to pay with cash. What’s more, thanks to improved technology and direct links with your bank, systems such as Apple Pay are making the overall payment process much more efficient. Although there is still a long way to go until we can completely dispense with cash, the signs of a revolution are there. Whether it’s peer-to-peer spending, contactless payments or mobile options, the way we pay is certainly changing for the better.

Why Blockchain Technology is Causing an Industry Revolution​

If you listen to the tech experts, then we’re in the middle of a blockchain revolution. The technology behind the often misunderstood currency, Bitcoin, blockchain is currently being adopted by a variety of industries.

Without delving too deep into its specifics, blockchain is basically a way of validating transactions without the need for human authorisation. Each time a Bitcoin payment is sent a specific address, it needs to be verified by a network of computers. Once the payment is verified, its details are stored in a block of valid transactions and this block is then uploaded to the network of the computer holding the blockchain.

Breaking Down the Blockchain

Essentially, a blockchain is a record of every Bitcoin transaction, in much the same way a bank uses a ledger to track payments across accounts. However, because this system is updated every 10 minutes and stored on network of computers, it means that each transaction is highly secure.

Although somewhat complex for the general public to really appreciate, the tech experts in the banking world, healthcare profession and security industry are all starting to use this technology to enhance their services. Indeed, according to a recent report by the Financial Times, blockchain looks set to “disrupt” the way the fund industry currently operates.

With blockchain gaining in popularity, many experts, including the Digital Current Group’s Barry Silbert, have suggested that this revolution could help to make Bitcoin a mainstream product. Back when the cryptocurrency first went live in 2009, many insiders believed it would become the currency of choice for the masses within a few years.

Unfortunately, those predictions were a tad optimistic as Bitcoin is still seen as an “alternative” option rather than “the” option for those spending money online. However, that’s not to say you can’t do some “mainstream” things with Bitcoin. Indeed, when you consider that British Airways, a company that made $1.2 billion (£850 million) in profit in 2015, now accepts Bitcoin payments, it’s clear the currency is gaining credibility.

Bitcoin Already Has Base Online

In fact, it’s not only the aviation industry that’s starting to realise the value of Bitcoin payments. iGaming, otherwise known as online gambling, is a $41 billion (£28 billion) industry that’s starting to see more Bitcoin-based sites spring up. VegasCasino, a Vegas Royal S.A., platform now offers an array of Bitcoin only betting options.

Inside the VegasCasino sportsbook, customers can place bets from as little as 0.10 mBTC on everything from football and Euro 2016, to the NBA playoffs and the Olympics. Similarly, the site also offers slots, table games and ever virtual lotteries; all of which are powered by Bitcoin alone.

Beyond the iGaming industry, Dell, the computer manufacturer, brokered a deal with Bitcoin walled Coinbase in 2015 which allowed cryptocurrency customers to get a discount on Alienware PCs. Similarly, Overstock.com began offering discounted prices on everything from watches to bed linen after it started accepting Bitcoin payments in 2014.

Are We on the Cusp of Technological Shift?

In a nutshell, what we’re currently seeing is a shift in the way transactions of all shapes and sizes are processed online. As we can see, Bitcoin is already thriving in a variety of industries and it’s this popularity that has helped blockchain technology move into the mainstream.

Whether or not this will in turn bring people’s attention back around to Bitcoin remains to be seen, but what is clear is that people are willing to accept new forms of technology and that should mean we’ll be seeing a myriad of innovations in the coming months and years.