What does the future of currency look like? It wasn’t that long ago when cash and checks ruled every transaction, but since then, credit cards, mobile payments and virtual money have taken over. One doesn’t have to look much farther than the popularity of bitcoins and the prominence of egift cards to see that consumers want new options. According to the Nielson Report, cash payments are expected to decline 34 percent between 2013 and 2018. Over that time span, credit card and debit card payments are predicted to rise by 65 percent and 49 percent, respectively, while electronic payments could see a 61 percent bump. In fact, the switch to virtual cash has been ongoing for years – it isn’t just a trend on the horizon. For example, direct deposit has rendered the physical paycheck nearly obsolete. According to an MIT Technology Review report, venture capitalists have invested roughly $2 billion in payment technology between January 2013 and June 2014. The money is in support of ideas that will remove cash from the conversation while bringing virtual currency to the forefront.
What has spurred the currency change?
It is no secret that virtual money and digital payment systems are desirable in today’s market. However, what is actually behind this movement? Naturally, the MIT Technology Review report points to technology as a driving factor. Smartphones, tablets, online banking, virtual rewards programs and other similar elements help consumers complete transactions without cash or checks. “The smartphone is the catalyst for a lot of change in [the payments] industry,” Dana Stalder, a venture capitalist with Matrix Partners, former eBay and PayPal executive and current board member of Poynt, told MIT. At the moment, cash remains the go-to form of currency across the world. But, given the efficiency and effectiveness of virtual currency, cash’s reign at the top of the food chain may be coming to an end.