Jinfo BlogWhere has all the cash gone?

Thursday, 31st May 2007 Sign in to MyJinfo or create an account be able to star items Click for printable version Subscribe via RSS to get updates as soon as Blog items are added Tweet about this item on Twitter Share on Facebook Share on LinkedIn

By Jill Fenton

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Non-cash payments entered the consumers shopping experience some years ago, with the introduction of credit and debit cards, direct payment facilities and online payment systems like PayPal. APACS statistics show that from 1995 to 2005 combined cheque and cash transactions declined by approximately 2,400 million, compared to an increase in non-cash payments of approximately 5,300 million. Since the early 2000's, PayPal has experienced immense growth in the online payments market, primarily due to its relationship with online auction site ebay; it claims to currently have 143 million accounts. But in order to expand, the payments provider must diversify and attract other online retailers. Virtual debit card facilities and increased security may aid growth but will this help fend off the ever increasing number of new entrants tapping at the door? Google Checkout was launched in summer 2006 and, although discredited by PayPal for offering a fraction of their services, has already gained a quarter of the top 500 online retailers. Checkouts system links credit card payment processing with advertising spend. Despite PayPals apparent blase attitude, ebay have still felt the need to ban Checkout from their site. And interestingly, PayPal and Yahoo! have launched a similar credit card/advertising system on its search engine. Although Checkout may not currently be a big threat to PayPals dominance, the number one brand in the world is always worth keeping an eye on. But is building new relationships with other online retailers the only growth option for PayPal? In May Visa announced that they planned to launch their 'payWave' cards throughout London in autumn 2007. The cards, for transactions under 10, are swipe and PIN free. Given that Visa estimates that 80% of the 27 billion annual cash transactions made in the UK are for items totalling less than 10, the potential for non-cash payment providers, facilities and services seems to be endless. Perhaps we should all start saving our pennies and pounds, not for financial reasons but historic.

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