It was not that long ago when the talk of a cashless society was regarded as laughable. While there is still a long way to go until there is no place in commerce for banknotes and coins, there is no doubt that recent technological advances have revolutionized the way we pay for things. This is particularly true in the online world, but it is also replicated in the physical shopping experience.
When bank cards first came into circulation, they served a simple purpose. They were there to guarantee a cheque that you wrote out from your chequebook to pay for goods and services if you did not have cash on you. The simple act of the merchant having sight of and writing the card details on the back of the cheque guaranteed that the payment would be made regardless of whether the payee had the funds in their account or not. Bank cards could also be used to take cash out at the newly installed ATMs. Meanwhile, credit card transactions involved the retailer running the card through a carbon-copied printing machine to take payment.
None of this happened in real-time. Cheques and credit card slips were batched by the retailer and posted to the processing centres. It could take days for accounts to be debited and even longer for the merchant to receive payment into their bank account. The advent of chips in debit and credit cards, together with payment machines that were linked via telephone lines to payment facilities was a huge step forward and prevented purchasers from accessing funds that they did not have. The banks were able to ‘unauthorize’ transactions on the spot.
The advent of the internet, however, brought a whole new set of challenges and opportunities for banks and payment providers. While we worry about internet security these days, there are, at least, many layers of encryption that safeguard us online. This was almost non-existent when the world wide web promised to revolutionise how we did everything. Paying for something purchased online could simply be handing over cash when the goods were delivered. Alternatively, you could send your bank payment details over email or in a series of texts. Wildly insecure, ease of payment was seen as the biggest barrier to eCommerce taking off.
Online banking was still regarded with great scepticism because of security issues, and this is why PayPal came into existence. Originally linked to eBay, it allowed buyers and sellers to transact without having to share financial information. The buyer had the reassurance that the seller could only take the agreed amount of money and the seller had the money in their PayPal account before the goods were dispatched. The banks had to up their game and developed the ‘Verified by Visa’ type of encryption which allowed people to use their bank cards for eCommerce transactions with greater confidence.
Online transactions were still a minority share of the market until the introduction of smartphones which again changed the landscape and the way in which we shopped and spent our leisure time. With smartphones and tablets came Apps and the payment platforms and banks moved rapidly to integrate their services wherever they could.
PayPal which had once been dominant found itself competing with challenger platforms. The introduction of payment wallets and prepaid facilities has changed the landscape again. Apple Pay and Google Pay keep our card details safe and use touch or face ID as an extra level of security.
Everything that this article has mentioned to date is dependent on the purchaser having a bank account. However, there are still a huge number of people who are classed as unbanked. Back in 2017, this was recorded as being a $380 billion opportunity for organizations that could offer facilities to those without a bank account. This is where an app like Boku comes into its own. Boku users can top up their account in advance through the mobile phone service provider, even if they do not own a bank account or credit card. This way, users can keep their bank details a secret when they are making online payments, making it an ideal choice for many who wish to shop online, or access any of the new slot sites in the UK, such as Playzee.
It is an easy-to-use carrier billing payment app. The customer simply chooses the Boku option at the checkout. They are then asked for their mobile phone number. Boku sends the customer an SMS message to which they reply ‘y’ to authorise the payment. The payment then appears as an itemised transaction on the user’s mobile phone bill. The arrival of an app like Boku offers yet another alternative to cash for payment.
Whether using cash will ever be totally phased out is still a hot topic of discussion. However, its usage dropped off significantly during the pandemic when contactless became the preferred option in the non-virtual world. Then banks increased the maximum transaction value, and most stores and restaurants reduced the minimum amount that could be spent on a payment card.