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Cash is dead, long live digital cash!?

In my previous blog, Cash is king, but for how long?, I discussed the global cashless trend. In a nutshell, recent studies show that consumers are using payment cards more often, for all sorts of purchases. At the same time, in Britain, cash machines were disappearing and along with them, people’s access to cash.

Today, five countries are home to more than fifty per cent of the world’s cash machines. Four of these countries, Brazil, China, Japan and the USA all saw a decline in the past year. While it’s true that all around the world, populations are replacing their cash for cards and access to cash is becoming harder, there’s still a caveat to this trend.


Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light;
-Dylan Thomas – 1914-1953


Will cash go gentle into that good night?

A new RBR study, Global ATM Market and Forecasts to 2024, shows that the number of cash machines around the world fell by 1% (roughly 700,000) in the last year. However, in developing economies and those in transition throughout the Asia-Pacific, Middle East and Latin America, cash machines are actually on the rise. India saw very slow growth in the number of cash machines, but growth nonetheless.

As the decline of cash machines in developed markets continues, so will the growth of cash machines in developing markets. Will this growth continue unabated? No, it will not. Still, in the coming years, this offset will lead to a rather slow decline in cash machines, from 3.24 million in 2018 to 3.22 million in 2024. The impending cash extinction will one day be upon us, but it won’t happen everywhere all at once.

 

 

When the time comes, will cash be missed? Perhaps, for a little while. But going cashless has its benefits. To name a few:

Safety – Cash is dangerous

Safety has always been a concern when it comes to cold hard cash. For many businesses, the less cash on the premises, the better. Especially as contactless payments become the norm, the less time spent on the handling and changing of money will result in faster service and shorter waiting lines for consumers.

Health – Cash is dirty

It’s also a matter of maintaining good hygiene. Did you know flu viruses can live on paper money for up to 17 days? At the London Met, an investigation into the hygiene of money found that cash in circulation contained life-threatening superbugs like MRSA as well as bacteria like Listeria. This is especially a problem for people with weak or weakened immune systems.

Scale – Cards are less messy

Major cities are also taking note. Here in the Netherlands, try paying a bus driver in cash, and she’ll just turn you away. In cities like Rotterdam, the entire public transport system is card-based. Same goes for London, where the Oyster card is your gateway to all transit options. As we speak, the city of Paris is about to launch a card-based payment method for its metro system. Passengers with a Navigo Easy card will be able to recharge their credit with their smartphones, further separating the virtual from the physical world.

Data – Cards are insightful

One of the aspects that few people think about is that card payments are easier to track. Measurements and financial reporting are more accurate when people use cards. Cards tell us a lot more than money spent. Cards tell us who spent it, where and when. Cards allow for predictive analytics that ideally improve the experiences of consumers.

Still, fraud is not going away

Technically, a card is only as valuable as the amount of cash it represents. However, the ‘danger’ of handling cash is also moving into the digital era. As the speed and overall value of transactions increase, so does the speed at which fraudsters operate.

Instead of looking over their shoulders, customers now rely upon you, the business owner or manager, to make sure their transactions are protected in the online environment. So of course, this naturally begs the question: what’s the digital and legal equivalent of a sawed-off shotgun hidden under the counter?

Well, you’d need a system. Ideally, a payment system with a 100% payment guarantee, that detects fraud but also prevents it from happening. A system with seamless integration and advanced business intelligence tools for invaluable insights that give you a competitive advantage.

I think I might know of such a system.

Get in touch with our team for more information on our payment services.

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Andrew Collins
New Business Development Manager

Latest articles

Automatic Top-Up - Alphacomm Solutions - Reloads

Cash is dead, long live digital cash!?

In my previous blog, Cash is king, but for how long?, I discussed the global cashless trend. In a nutshell, recent studies show that consumers are using payment cards more often, for all sorts of purchases. At the same time, in Britain, cash machines were disappearing and along with them, people’s access to cash.

Today, five countries are home to more than fifty per cent of the world’s cash machines. Four of these countries, Brazil, China, Japan and the USA all saw a decline in the past year. While it’s true that all around the world, populations are replacing their cash for cards and access to cash is becoming harder, there’s still a caveat to this trend.


Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light;
-Dylan Thomas – 1914-1953


Will cash go gentle into that good night?

A new RBR study, Global ATM Market and Forecasts to 2024, shows that the number of cash machines around the world fell by 1% (roughly 700,000) in the last year. However, in developing economies and those in transition throughout the Asia-Pacific, Middle East and Latin America, cash machines are actually on the rise. India saw very slow growth in the number of cash machines, but growth nonetheless.

As the decline of cash machines in developed markets continues, so will the growth of cash machines in developing markets. Will this growth continue unabated? No, it will not. Still, in the coming years, this offset will lead to a rather slow decline in cash machines, from 3.24 million in 2018 to 3.22 million in 2024. The impending cash extinction will one day be upon us, but it won’t happen everywhere all at once.

 

 

When the time comes, will cash be missed? Perhaps, for a little while. But going cashless has its benefits. To name a few:

Safety – Cash is dangerous

Safety has always been a concern when it comes to cold hard cash. For many businesses, the less cash on the premises, the better. Especially as contactless payments become the norm, the less time spent on the handling and changing of money will result in faster service and shorter waiting lines for consumers.

Health – Cash is dirty

It’s also a matter of maintaining good hygiene. Did you know flu viruses can live on paper money for up to 17 days? At the London Met, an investigation into the hygiene of money found that cash in circulation contained life-threatening superbugs like MRSA as well as bacteria like Listeria. This is especially a problem for people with weak or weakened immune systems.

Scale – Cards are less messy

Major cities are also taking note. Here in the Netherlands, try paying a bus driver in cash, and she’ll just turn you away. In cities like Rotterdam, the entire public transport system is card-based. Same goes for London, where the Oyster card is your gateway to all transit options. As we speak, the city of Paris is about to launch a card-based payment method for its metro system. Passengers with a Navigo Easy card will be able to recharge their credit with their smartphones, further separating the virtual from the physical world.

Data – Cards are insightful

One of the aspects that few people think about is that card payments are easier to track. Measurements and financial reporting are more accurate when people use cards. Cards tell us a lot more than money spent. Cards tell us who spent it, where and when. Cards allow for predictive analytics that ideally improve the experiences of consumers.

Still, fraud is not going away

Technically, a card is only as valuable as the amount of cash it represents. However, the ‘danger’ of handling cash is also moving into the digital era. As the speed and overall value of transactions increase, so does the speed at which fraudsters operate.

Instead of looking over their shoulders, customers now rely upon you, the business owner or manager, to make sure their transactions are protected in the online environment. So of course, this naturally begs the question: what’s the digital and legal equivalent of a sawed-off shotgun hidden under the counter?

Well, you’d need a system. Ideally, a payment system with a 100% payment guarantee, that detects fraud but also prevents it from happening. A system with seamless integration and advanced business intelligence tools for invaluable insights that give you a competitive advantage.

I think I might know of such a system.

Get in touch with our team for more information on our payment services.

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Andrew Collins
New Business Development Manager

Latest articles

Automatic Top-Up - Alphacomm Solutions - Reloads

Cash is king but for how long? Alphacomm Solutions

Cash is king, but for how long?

The latest Global Payment Cards Data and Forecasts report by RBR, released in February 2019, highlights the sharp rise in the acceptance and usage of payment cards. But are merchants ready for a cashless economy?

In 2017, approximately $25.1 trillion worth of purchases were made with payment cards compared to 2016. In this same period, e-commerce card expenditure reached $4.5 trillion; an increase of 13%. According to the study, card expenditure worldwide is expected to be valued at $45.2 trillion by 2023. E-commerce will make up a substantial part of this figure as it is predicted to hit $11 trillion.

Low value payments are becoming more frequent

One explanation for the rise in card expenditure is consumers are increasingly using their cards for low value payments. In recent years, mainstream adoption of cards as methods of payment has been buoyed by improvements in convenience.

One notable exception to the trend is China. Chinese consumers generally reserve cards for high value purchases. Nonetheless, the Asia-Pacific region, with its 28% share in payment volume, is still responsible for 50% of global card expenditure.

Access to cash in a cashless economy?

Consumer attitude is changing when it comes to commerce. In Europe, many businesses and festivals have started to eliminate cash as a payment option. Another development in the payment landscape is the passing of the Payment Services Directive (PSD2) by the European Parliament. The directive provides a much-needed regulatory framework within which European banks and fintech companies can coexist and allows for greater access to alternative banking options.

However, these changes and shifting attitudes have left some wanting. As younger generations do most of their banking online, brick and mortar bank branches have been disappearing across Europe. According to analysis in the UK by Consumers’ Association Which?,  ATMs are disappearing at breakneck pace, especially in rural areas. In 2018, approximately 200 British communities either had poor or no access at all to cash machines. As access to cash becomes a problem, card expenditure will undoubtedly continue to rise. But are merchants ready for the cashless economy?

Securing revenue in the online world

The more we spend online, the more we need to be aware of the pitfalls. As the value of card transactions drops and the frequency of use rises, merchants will increasingly see the need to take measures to protect their business by securing their revenue. Avoiding costly chargebacks and outsmarting fraudsters are among the top challenges for online merchants.

Furthermore, as e-commerce spreads to new markets and international consumer purchases become more prevalent, the need for tools like as SEPA e-mandates and digital payment reminders will only rise. How are you preparing for the cashless economy?

Get in touch with our team for more information on our business solutions.

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Andrew Collins
New Business Development Manager

Latest articles

Automatic Top-Up - Alphacomm Solutions - Reloads

An explanation of the revised Payment Services Directive (PSD2)

What does PSD2 mean?

PSD2 is the acronym for Payments Services Directive 2. It’s the follow-up to PSD1 which was adopted in 2007. It’s considered a maximum harmonisation directive. As such, after approval by the European Parliament, it takes effect in all countries within the Single Euro Payments Area (SEPA) albeit with minor differences.

PSD2, which was adopted in 2015, officially came into force in January 2018. In the Netherlands, implementation actually took a bit longer as the revised Payment Services Directive (PSD2) came into effect in February 2019.

What does the Payment Services Directive do?

The purpose of the Payments Services Directive is to improve the European payments industry by promoting healthy competition and increasing the participation of non-banks. It also provides protections by facilitating the harmonisation of rights and obligations of consumers and payment providers across the European Union.

What’s the difference between PSD1 and PSD2?

Compared to 2007 when SEPA was introduced, the landscape for banking and digital payments has changed quite a lot. It is essential that regulations keep up with the pace of technology and consumer trends. To that end, PSD2 takes things a step further by planning for the future.

Fintech companies are increasingly handling more banking duties on behalf of consumers. PSD2 makes sure that these third parties play by the rules and that consumers have the final say on how their banking data is managed.

Whereas PSD1 was introduced in order to harmonise financial regulation, PSD2 aims to foster innovation within the industry, empower consumers by giving them more control over their data and improve security for online payments.

What are the implications of PSD2 for the fintech industry?

As of the launch of PSD2, banks are now required to provide third parties with access consumer’s banking data once the consumer has given explicit approval. This change has the fintech industry buzzing with excitement. Fintech developers are now able to create apps that directly interface with the consumer’s banking data and pull information from various bank accounts.

In other words, somebody with bank accounts at three different banks could download a third party app, provide the necessary permissions and thus gain never before seen insights into his or her financial situation through a unified dashboard.

Another aspect of  PSD2 is that consumers can now also authorise payments via these third parties. Registered service providers can act as acquirers and deal directly with the banks on behalf of the consumer, completing transactions without the need of an intermediary.

Find out more on PSD2 at the following resource:
Payment services (PSD 2) – Directive (EU) 2015/2366

At Alphacomm Solutions, we’ve been working on getting the most out of PSD2 since day one. Our solutions are always up to date and implementation is always quick. Get in touch with our team for more information on our business solutions.

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Andrew Collins
New Business Development Manager


Latest articles
Automatic Top-Up - Alphacomm Solutions - Reloads

mastercard, apple push back on free trials and dodgy subscriptions

Mastercard, Apple, push back on free trials and dodgy subscriptions

The internet is littered with free trial offers. One thing these trials tend to have in common, is they ask the consumer for their credit card information. Once the trial ends, the consumer often forgets to cancel the subscription and is consequently automatically signed up for recurring billing.

The same can be said for offline commerce. Physical products, especially within the health and wellness industries, are often offered with supposedly no strings attached only to bait the user into a recurring payment scheme.

In all fairness, free trial offers can be highly beneficial to both consumers and business alike. However, in many cases, there is a lack of transparency that does more damage than good.

Unwanted payments cost money

Unwanted recurring payments are costly for both consumers and banks alike. The unsavoury practice, though generally accepted, often leads to payment disputes and costly chargebacks.

MasterCard recently announced a rule change that requires merchants to gain approval of cardholders at the of a trial period before billing can start. The move is aimed at protecting consumers as well as curbing costs at a time when shoppers have an ever-expanding range of banking alternatives to choose from.

No more mystery transactions

Moreover, merchants are now required to send a receipt after each payment. The receipt, specifying the merchant name and transaction details can be sent either by email or text message and inform the consumer of cancellation options. This way, consumers will always have control over how and where their money is spent.

Additionally, credit card statements are also required to include the merchant’s name a well as a web address or phone number. It’s a move that is sure to boost consumer confidence in both the payment method and the merchant’s business practices.

In 2018, Apple took a similar stance on deceptive free trials in apps. One requirement is users are now prompted to opt in for recurring subscriptions. Another is that the billable amount, referred to as the ‘true cost,’ must always be displayed prominently. Recently, Apple followed up by making it easier for iPhone users to manage their subscriptions from within the App Store.

 

Do you offer free trials for your products and services? Not sure whether you’re playing by the rules? Are you losing time and money as a result of disputes or chargebacks? Perhaps it’s time to speak with a payment consultant.

 

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Andrew Collins
New Business Development Manager


Latest articles
Automatic Top-Up - Alphacomm Solutions - Reloads

 

Canadians trade traditional payment channels for speed and convenience

Payment Canada’s 2018 Methods and Trends Report came out this week. The report, written by Payments Canada in collaboration with PSPs, payments consultants and researchers, aims to shed light on the Canadian payments landscape in 2017.

Unsurprisingly, the overall conclusion of the report is that Canadians are increasingly opting for digital methods of payment as well as the adoption of new payment channels such as mobile. The key factors here are speed and convenience.

Key takeaways from the Payments Canada report:

  • On the whole, 2017 was a great year for electronic payments. Canadians made 22 billion payment transactions, many of these were electronic.
  • In fact, 2017 saw a 48 per cent volume increase in online transfers.
  • Contactless payments are also on an upwards trajectory and have increased 55% in both volume and value since 2016.
  • Debit card use increased in 2017, primarily due to prevalent use of card (contactless) and mobile tap.

In Canada, credit cards are king. A key driver of credit card use is their integration into convenient and fast emerging payment channels such as mobile phones, game consoles and smart speakers.

  • 90 percent of Canadians own credit cards and their use have increased by 33 per cent since 2012.
  • Credit cards account for 64 per cent of the volume of payments made in person, online or at POS.

The data shows that consumers are putting more stock in the payment experience. The quicker the better. They are also eager to make use of innovative payment channels as long as these are convenient in use.

To read the complete Canadian Payment Methods and Trends (CPMT) report, visit the Payments Canada website.

 

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Andrew Collins
New Business Development Manager


Latest articles
Automatic Top-Up - Alphacomm Solutions - Reloads