The United States still runs on cold hard cash but in the past few years we've seen the rise of the technology that will ultimately shift the scales in favor of virtual payments. A cashless society is not only inevitable, it'll be here before you know it. When was the last time you paid for something by check? More importantly, when was the last time you shopped somewhere that accepted cash and nothing else?
This shift is, and will continue to be, driven by changes in technology. Today's virtual payment methods are faster, more secure and overall less expensive than those of a decade ago. They're also more varied. Mobile payment platforms include digital wallets, apps, peer-to-peer money sharing and lending platforms and POS or NFC systems.
Credit and debit cards reigned over the virtual payment space for nearly a century but the launch of mobile payment methods like Apple Pay, Samsung Pay and Android Pay (formerly Google Wallet) along with a myriad of apps, and even wearables, has created a landscape where cash and cards are becoming increasingly unnecessary.
Mobile Payments are Blowing Up
In 2014, there were only seven banks that had mobile payment support. But now, banks all over the world are developing their own mobile programs.
The mobile payment industry has seen a huge influx of R&D dollars as some of the most powerful corporations in the world (think Apple, Google and Facebook) have devoted resources to innovation in this space.
A recent KPMG report showed an enormous jump in investments in financial technology - a 106% increase from 2014 to 2015 - and eMarketer has predicted that tap-to-pay transactions will hit $210 billion in 2019 (compared to $8.7 billion in 2014). It's easy to believe that Tim Cook had it right when he said, "Your kids won't know what money is."
And They're Still Changing
These days the hardest part of going cashless is deciding how to do it. Samsung Pay, Apple Pay or Android Pay? Don't forget LoopPay - then there are person-to-person payment apps like Square Cash and Venmo, along with the lesser known apps Tilt, Tab, Dwolla, LevelUp and Flint. Unless, that is, you're using Bitcoin and then you might download Coinbase, Fold, Breadwallet or Blockchain.
And on top of all this, you still need to log into the proprietary mobile payment systems for the services you use.
Then there's the question of mobile wallet or wearable? NFC payments are coming soon to Fitbit and a number of other fitness trackers, the most popular big name smartwatches (Apple Pay is already available on the Apple Watch) and even smart jewelry like Ringly.
The Far Flung Future of the Cashless Society
The mobile payment landscape is changing rapidly, but what you probably won't see are big changes to the shopping experience.
While mobile payments could result in a cashier-less society along with a cashless one, paying for purchases via wi-fi enabled beacons in unmanned retail spaces still strikes most people as something straight out of dystopian fantasy - or at the very least just kind of odd.
Consider the convenience of ordering and then paying for a Starbucks coffee via their app - something thousands of people do every day. Sit in any Starbucks location long enough and you'll see scores of people walk in, wait for their name to be called and then leave with their drinks without saying a single word to an employee. The human connection is conspicuously absent.
How you feel about that likely depends on your personality, but chances are good that for many people it will be one of the main mental hurdles that will have to be overcome before mobile payments have a bigger impact on the retail experience.
Another change you're unlikely to encounter any time soon? The widespread adoption of payment via microchips embedded in people's bodies as explored in Charlie Warzel's recent investigative piece for BuzzFeed. Outside of the religious objections and the squeamishness factor, Warzel's experiences prove that the simplicity of living sans cash can still involve a lot of complex prep work - but that too will change as the technology matures.
What's abundantly clear is that the technology and the emerging mobile payment systems have to evolve together and be adopted together. While some payment apps will work with older smartphones it helps to have a device with the fastest mobile processor available if you want to be a pioneer of cashless living. Samsung Pay for example will work best on the Samsung Galaxy S7 edge, powered by Snapdragon.
And more importantly, for mobile payments to overtake cash as king, a handful of services will have to rise to the top the same way Mastercard, Visa and American Express came to dominate the credit landscape.
One of the biggest barriers to widespread adoption of mobile payments is the confusing array of ways consumers can pay for everything, from coffee to clothing, with smartphones. Until there are clear winners in the payment wars, convincing people that mobile payments are simpler than cash, credit and debit will remain a significant challenge.
Main image by HLungaard