According to a new report from the ATM Industry Association, mobile payments are unlikely to make a dent in the real customer demand for cash over a span of the next five years.
As opposed to cash demand diminishing, it is non-cash alternatives that are anticipated to suffer—debit, credit, and prepaid cards.
ATMIA commissioned consulting firm Tremont Capital Group to conduct research across the retail payments industry within the United States. Despite mobile payments beginning to catch fire from companies such as Starbucks and Apple, the overall uptake remains harshly limited. Market share shift is derived from electronic payments as opposed to cash.
“An analysis of 30 countries during the five year period 2009-2013 showed an average year-on-year increase over this period of cash in circulation of 8.9%, compared to economic growth rates below 3%,” said Mike Lee, the CEO of ATMIA. “In truth, cash use is more robust and mobile payments less stellar in growth than current conventional wisdom might suggest.”
In terms of the U.S. only, this analysis may hold water. However, the UK market may not be as consistent. Contactless chip-based payments are well engrained in the mainstream, thus making the cards in physical wallets, or via mobile all the more valuable, more so than cash and coin.