Cash, Coved’S Collateral Victim – 19
2021-01-29 | by CusiGO
Increasingly fierce competition between payment systems takes place in 2020, that is, covid-19, with one loser, cash, and several winners, such as “contactless” or contactless technology. This is the main conclusion of the 10th edition of the payment trend report compiled by minsait payments, a subsidiary of Indra. The study, which combined the views of more than 80 banking executives, surveyed 4400 users in southern Europe (Spain, Portugal and Italy), the UK and Latin America.
The report, written in collaboration with international financial analysts (AFI) and available for download on the website, points out that 70% of Spaniards have reduced or even abandoned their cash use due to the epidemic. In the view of banking professionals, more people think that cash will disappear around 2040 (36%), rather than those who don’t think they will see this moment (33%)
As a result of the epidemic, banknotes and coins have been stigmatized to a certain extent, especially in their first few months, when people paid more attention to physical contact with viruses than to the spread of aerosols. Sixty percent of Spaniards say they don’t like cash, and that feeling can be extended to the use of dating phones.
On the other side of the currency is the increase in the use of “contactless” payment alternatives; 78% of the population has used contactless technology to pay at the end of the point of sale, which is called POS (through the “point of sale”) in industry terminology. Borja Ochoa, chief executive of minsait and head of global financial services, highlighted one of the three trends in the report, namely, the increase in e-commerce transactions and the increase in the number of credit cards. “We will invest heavily in technology and bet on the cloud,” Ochoa announced, in the face of the unstoppable growth of global financial transactions.
“It’s clear that this year’s main character is covide,” said Fernando April Martorell, President of Indra. “It accelerates the trend that already exists. A very important step towards a cashless society. ”
This also promotes the rise of e-commerce. 42% of Spaniards said they are now shopping more frequently online, a high proportion, but lower than the UK (44%), Italy (46%) and Portugal (47%). In Latin America, this increase is most pronounced, ranging from 50% to 63%. Credit card remains the most common payment method in online shopping – 85% of Spaniards use it – far behind other options, such as virtual prepaid cards, account payments and P2P applications such as bizum. Miguel Angel Prieto, director of payment solutions at minsait payments, stresses how the average face value of e-payments has fallen because “it’s no longer shy of using cash for small quantities such as newspapers or bread.”.
The presentation of the report attempts to go beyond the analysis of what happened in 2020, which in fact means looking away from the impact of covid. At a virtual round table, emerging trends were discussed, such as competition from large technology companies, cooperation with so-called “fintech” and “neobanks”, or the gradual adoption of biometrics as a method of payment authentication.
One of the most interesting aspects of the reporter is the importance of the customer experience. “This is one of the lessons that covid has learned in recent months, especially in” contactless “technology: if you offer new, better service and customer experience, it will eventually be used,” said Enrique Alvarez, head of European operations at minsait payments.
Lucyna Janas, who is in charge of Google play’s European, Middle East and Asian alliance, also stressed the importance of conquering end users. “In all our products, we have the experience that if a technology can make life easier, it will be used. Our goal in terms of payments is the same as any other activity: to find simple and effective solutions, “he said.
In terms of commercial and technological alternatives, the situation is becoming more and more complex – for example, 42% of experts believe that blockchain will partially replace the current mode of payment – and with the arrival of large technology companies such as Google and fintech, so will competitors. The key, they said at the meeting, is the cooperation of all stakeholders, as it is difficult to combine technological excellence with strong regulatory requirements in the financial industry. As Carmen Alonso, director of business development for visa southern Europe, emphasized, public administration can also participate in this new payment cooperation environment.
It’s not a simple job, but from a commercial point of view, there are still some niches to be developed, such as payments, which, at least before the pandemic, were considered almost exclusive areas of cash. Using a credit card or a mobile phone to pay for a bus in a bakery is no longer a quirk, just as we are used to masks or hydrogels. One day, they will disappear day by day, but the changes in payments that accelerate the epidemic do not seem to be reversed.