Is paying for goods and services with cash coming to an end?
With the recent announcement of the Apple Pay system, which allows contactless payments through your iPhone, Australians could be using their credit cards in dramatically different ways in the future.
New research by RateCity has revealed cash is a dying payment method with 65 percent of Australians stating they would prefer to pay with plastic.
Today, Visa figures show 28 million payWave transactions are occurring every month. Yet, despite the fact Australians are making so many quick and cashless purchases there has not been a rise in credit card debt.
RateCity's product director, Peter Arnold, said while cash isn’t completely dead yet, among certain demographics, alternative payment systems are becoming increasingly popular – with many viewing it as a convenient new way of managing their money.
The trend towards cashless payments
From cattle to cash, there have been various ways of buying goods and services throughout history. Now, credit cards are a common go-to and they are increasing in popularity with the tech-savvy Gen Y.
According to the RateCity data, 15 percent of Gen Y rarely carry cash – compared to 56 percent of the baby boomer generation who still carry cash every day.
In terms of national trends, it seems the Victorians are ditching cash faster than the rest, while our South Australian and Northern Territory neighbours still enjoy lining their pockets with cash, rather than plastic.
Of course, it’s easy to see why more and more are moving to cashless systems, as credit cards provide many perks that paying with cash doesn’t, they're easy to use and — provided you make your repayments on time — can even land you worthwhile rewards, from hotel stays to free flights.
And now, technology monolith Apple has jumped on the bandwagon, with Apple Pay.
What is Apple Pay?
Apple's role as a technological thought leader means new product development is a core part of its activities. The iPod was a chief example of innovation in the sector, and now the behemoth has turned its attention to alternative payment systems.
According to the organisation, "Apple Pay will change how you pay with breakthrough contactless payment technology and unique security features built right into the devices you have with you every day."
Those who take up the technology will pay for purchases by simply hovering their iPhone above a pay terminal at a participating retailer, with their finger on the Touch ID, which is one of various security features. Apple Pay can also be used to make online purchases.
The system has just been rolled out in the US. An Apple spokeswoman told the Sydney Morning Herald that there is no planned launch date in Australia — yet.
How does Apple Pay change the payments landscape?
Speaking to Ross Greenwood on 2GB, Arnold discussed the significance of Apple Pay.
"One thing's for sure, people are loving alternative payments," he said.
When asked by Greenwood whether this marks "the end of cash", Arnold was cautious.
"Cash is always going to have a place," Arnold said, noting that certain demographics are more receptacle to new payment technologies.
For example, Gen Y individuals tend to welcome these kind of payment innovations. A big perk of contactless payments such as PayPass, payWave and Apple Pay is the convenience it affords. Purchasing goods and services is simple, whether you're buying items in-store or online.
"What we do know is when Apple gets on to something, they do it properly, they have mass appeal and they make it sexy."
Remember — no matter how you pay, make sure you're getting the best possible deal by completing a credit card comparison.