Cards and payments – the future …

28We can now pay for almost anything online, leading some observers to suggest that the days of carrying physical money in our pockets are numbered. But how likely is a cashless society? Are we ready to abandon the security of money that we can hold in favour of the convenience of an e-wallet? Here we review the electronic alternatives to cash and what it means to anyone looking for a job in the cards and payments sector.

The largest online payment system is currently Paypal with over 100 million users. Paypal, while it is electronic, is still closely linked to the traditional banking system. It is safe and convenient to use and acts as a bridge between the world of real money and credit cards and the online world.

Online currencies such as Bitcoin are electronic and independent of central banks and financial institutions. Their value is dependent on supply and demand and is not subject to political interference. Their disadvantages are that nobody guarantees their value and that they are vulnerable to online theft and hacking.

With no government oversight, online currencies also attract criminals looking to move money around outside the banking system. Online currencies are a long way from being secure and trusted enough to disrupt cash and card payments.

Mobile payment and money transfer systems such as M-Pesa in Kenya now allow millions of people to transfer money instantly without having to use expensive intermediaries or to travel long distances. In Kenya mobile transactions have grown exponentially but have not yet started to replace cash: The mobile payments industry functions in parallel to traditional money transactions, at least for the moment.

In all likelihood, online currencies and e-payment systems will continue to grow rapidly as the online economy grows. With cash payments still accounting for up to 80% of global transactions, a cashless world is still a long way away. Most people still prefer the security of physical money to electronic money as they can store it themselves. At the end of the day, you can’t spend e-money when the power goes out or your mobile battery fails.

Cash has been king for thousands of years and will in all likelihood continue to dominate payments for years to come. With the current economic crisis, people are highly unlikely to give up the happy sensation of having a wallet of cash in their pocket. Mike Lee, CEO of the ATM Industry Association, argues on the Mobile Payments Today website that the simplicity of cash and cash transactions will prevent it from being replaced by e-money.

Another major advantage of cash transactions is that once you have the money in your wallet, it is free to spend. Electronic systems always invoke transaction fees that quickly add up if used frequently.

The cards and payments sector is likely to witness the emergence of a complex and shifting blend of cash, card, e- and m-payments. This poses huge challenges to areas of the cards and payments sector such as payment and identification security, transaction processing and point of sale software and management.

This state of flux makes the cards and payments sector an exciting and challenging area to work in. ISL actively recruits for positions in the cards and payments domain. We recruit for a range of jobs, which may reach from a Prepaid Project Manager to an EMV Software Engineer to a Payment Processing Business Development Manager. To further your career in the cards and payments sector, drop us an email at Lawrence@isluk.co.uk or phone us to find out how we can help you.

Information Technology