Cash AND cards to go the way of the cheque?
Tech experts say payments by mobile will 'eliminate' both by 2020


Phone chips will become main method of payment

Users will pay via NFC ('near field') chips where they 'bump' mobiles on tills to
pay

65% of 1200 experts agreed with statement

Poll includes experts from Google, Microsoft and Harvard

By ROB WAUGH

Published: 12:05 GMT, 18 April 2012 | Updated: 12:05 GMT, 18 April 2012











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Payments via mobile systems such as NFC (near field communications) chips will overtake both cash
AND cards by 2020, claims a new report

The pennies in our pockets could soon be consigned to the history books -
along with debit and credit cards.

A poll of technology experts by America's Pew Internet Research centre found that most predicted that mobile-phone payments would
have overtaken both cash AND cards by 2020.

Of the 1200 experts polled, 65% thought that cash and cards would be nearly wiped out by 2020.


The poll included Harvard experts as well as engineers from companies such as
Google and Microsoft.

The need for either cash or cards will be 'eliminated' by
chips in mobile phones.

In shops, people will 'bump' their phones against tills to pay - or simply pay
online via apps.

Many tech experts also believe that the new systems will be MORE secure.


Google chief economist Hal Varian said, 'Two-factor authentication (secret number + physical device) is better than one-factor authentication, and smart phones seem to have a natural role here.'

Microsoft  engineer Christian Huitema says, 'We
have already witnessed the transition from cash to debit/credit cards.
The electronic wallet is not much more than a ‘virtual
card,' in which near-field wireless communication replaces the reading of a magnetic stripe.'





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The poll, which included experts from Harvard and Google, expected that
'near field communication' systems - where users 'bump' phones against tills to transfer funds, as well as
online payments from phones, would have overtaken cash and cards in eight years time.




Based on a technology known as near-field communication (NFC), Google Wallet allows users to store payment information in the cloud and pay for goods
at participating retailers by tapping their phone at the point of purchase



'Overall, a majority supported the scenario that by 2020 most people will have
embraced and fully adopted the use of smart-device swiping for purchases
they make, nearly eliminating the need for cash or credit cards,' says Pew, a respected technology think
tank.

'These experts feel that the explosive growth
in the use of smartphones and other mobile devices, makes these systems an obvious
choice to replace established modes of payment in day-to-day commerce.'

The research found that the change is already happening - particularly in America, where phones using Google Wallet (a mobile payment
system) and NFC payment chips are more common.

A March 2012 Federal Reserve report found that 21% of mobile phone owners
had used mobile banking services in the past year and that another 11% of mobile owners plan to use such services in the next 12
months.

The study also found that some 12% of mobile phone owners have made payments—such as paying bills online or transferring money directly to another person's account—via their
phones.

In the developing world, the figures are even higher - 20%
of Kenya's GDP is sent via text message every year using the country's
M-Pesa system.

In late 2011, Google launched Google Wallet in partnership
with Citibank and MasterCard.

Based on a technology known as near-field communication (NFC), Google Wallet allows users to store payment information in the cloud and pay for goods at participating retailers by
tapping their phone at the point of purchase.

Many analysts predict that Apple will announce its own virtual wallet service in the near future.








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