Cash will be obsolete in three years claims PayPal
Purses, wallets and cash will become redundant within three years, according to the electronic payment firm PayPal.
It says it will be possible to pay for everyday purchases via mobile phone apps and cards with the result people will no longer need to carry real money.
The claims came as the firm, which is owned by eBay, unveiled a new roll-out of its mobile phone-based smart payment system.
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Old-fashioned: Shoppers will soon be able to leave their purses and wallets at home, according to PayPal
Old-fashioned: Shoppers will soon be able to leave their purses and wallets at home, according to PayPal
Shoppers can download a PayPal app to their smartphone which can be pared with the payment system of participating retailers, from cafes and bakers to market stalls.
This means shoppers can authorise payments on their phone, with the money immediately transferred to the trader, just as they currently do with internet purchases.
The retailer gets a ‘payment confirmed’ message on their own smartphone or tablet which includes a picture of the customer by way of a security guarantee.
PayPal research suggests that most consumers do not carry more than £20 in cash on them.
Already, many people rarely use cash on a day to day basis, relying on debit and credit cards for all their purchases, whether it is petrol, a train ticket, a newspaper or a sandwich for lunch.
The new PayPal smartphone app adds another alternative to folding money and coins.
No more cash. PayPayl comes to Covent Garden marketIt also means retailers who have not taken card payments in the past, such as market traders, now have a new relatively cheap and new way to allow customers to pay.
The adoption of automated payment systems rather than face-to-face transactions involving cash is gathering pace.
Boris Johnson recently announced that hundreds of London Underground ticket offices will close next year. People are being encouraged to use Oyster cards and new generation of contactless debit and credit cards that can be swiped across ticket barrier terminals.
On the high street, retailers from coffee shops to newsagents now accept the contactless cards, which do not require users to put in a four digit PIN, for small value purchases.
Retailers are also slimming down the number of traditional purses, which can carry cash and coins, on their shelves in favour of slimline card holders.
The new PayPal Here app and smartphone system, which can authorise a payment either with or without using a debit card, is being launched today at London’s Covent Garden market.
The firm claims that the system can help small businesses, which may be missing out on up to £800 million worth of sales every year by not taking card payments.
Futuristic: The latest move could end the days of fumbling for cash, already a rare sight on the high street
Futuristic: The latest move could end the days of fumbling for cash, already a rare sight on the high street
Narik Patel, PayPal’s director of mobile merchant services, said: ‘We know from our research that shoppers don’t usually carry more than £20 these days, so it’s great to see that these traders will never miss a sale again because a customer has to dash off to get cash.
‘This is another step on the journey towards a wallet-less high street, where customers will be able to leave their wallet or purse at home and pay using their phone or tablet. We predict that by 2016 this will become a reality.’
The firm’s PR director, Rob Skinner, added: ‘We believe that is because using a mobile to pay for things will be so commonplace that people will not feel the need to carry cash.
‘We are not saying that no-one will use money or plastic cards, only that it will be possible to live day to day without them.’
Artist Adam Regester, who sells his work at Covent Garden, has been using the system on a trial basis for a few weeks.
Rare: Customers often carry less than £20, leaving few options for traders who don't accept credit cards
Rare: Customers often carry less than £20, leaving few options for traders who don't accept credit cards
He said: ‘For as long as I can remember, we’ve always relied on customers paying with cash or perhaps the odd cheque. But now I’ve lost count of how many times people ask to pay by card or say they’ll just pop to the cash point but never come back.
‘Giving our customers more options to pay and taking cards solves the problem, which is especially crucial in the run-up to Christmas. Even within these first few weeks, I’ve seen an increase in sales.’
The system has already been operating with a number of small traders in Richmond, south west London, since August. Participants include a hotel and a number of coffee shops, cafes and restaurants. DailyMail