According to the Payments Council, cash transactions in the UK fell to 48% of overall payments last year, down from 52% in 2013.
This comes as no surprise, given the international rise of popular social payment services such as Snapcash, Squarecash and Venmo, as well as the already mainstream use of Paypal to shop online. These services, along with debit cards and digital currency trade, have collectively overtaken payments in physical bills and coins as of last year.
Crunching the Numbers
It is expected that in about a decade cashless payments will account for £28.8 billion, as opposed to £12.7 billion in cash trades.
In an interview with FT, Hannah Nixon, managing director of the UK’s Payment Systems Regulator, said that there is “no doubt we are moving into a new payments world.” This is very important news for the UK, since more than 44% of the country’s online payments are done via mobile phones.
‘Just Snapcash Me’
Imagine sharing a cab with your flat mate after a long night out drinking. As soon as the cab is a couple of blocks away from your street, both of you reach into your wallets to pay. You only have a $100 bill. Your flat mate smiles at you and tells you, “It’s alright. Just Snapcash me,” as she pays the driver.
There. No hassle, no awkwardness. Peer-to-peer payment apps are all the rage in FinTech for a reason. You no longer need to worry about spare change or swiping cards. One click of a friend’s image and your funds join a Twitter feed of bill splitting and IOU payments.
What Does All This Mean for the Digital Currency Ecosystem?
New Bitcoin mobile wallets are popping up every fortnight, featuring cutting-edge safety measures to protect your bitcoins, but that is just not enough to beat conventional social payment systems. Capitalizing on the ease of transfer, coupled with a sleek, friendly UI is paramount to any bitcoin app’s mainstream success.
This is the perfect age for Bitcoin. Over 27% of global online transactions are done via mobile phone. For Bitcoin to conquer the FinTech market, it is important to stop thinking about digital currency in the same way early adopters saw it in 2009 — secure, impermeable and anonymous.
Apps like Circle — which may be frowned upon by digital currency hardcore enthusiasts — are popular for a reason. They mimic Facebook’s social platform with bitcoin’s quick monetary transfer.
There is nothing wrong with worrying about the security of your bitcoins if you’re saving for a house, but the majority of day-to-day trades shouldn’t take more than 10 seconds.
Customers who just want to pay for their friend’s beer would put more emphasis on ease of use over security and privacy any day. This is the reason why, in spite of digital developments, the most popular payment method by individuals, when businesses are removed from the equation, remains cash in the UK. For Bitcoin wallets to outclass other mobile-friendly social payments, your flat mate should be able to pay for that cab ride before it reaches your doorstep.