Apple Pay Is Leading The Electronic Currency Revolution

CASHING OUT – WHY PHYSICAL MONEY IS IN TERMINAL DECLINE

- Benjamin Kerry & Gavin Lenaghan

Analysts and financial whizz-kids have been predicting for years that electronic payments will overtake old-fashioned notes and coins but with the rise of Apple Pay, it looks like this will now become a reality.

In the UK, e-payments including debit card swipes are set to overtake cash as the most frequently used payment method. In 2006, 62% of all payments in the UK were made with cash. In 2016, that fell to 40%. If current trends continue then the figure could be as low as 21% by 2026.

At the same time, the number of times people used ATMs and the amount of cash drawn from them are both falling fast. 2016 saw the lowest number of withdrawals for six years while £6bn less was withdrawn compared to the previous year.

Other canaries in the mine include the number of customers using electronic payments for traditional cash items such as food or drink. Wetherspoons, the largest pub chain in the UK saw cash payments fall 5% every year for the past four years. Sandwich shop Pret A Manger say more than half their customers are now paying electronically and Nando’s – the hottest restaurant chain in the UK at the moment – says 71.3% of payments it takes are electronic.

YOUR SMARTPHONE IS YOUR WALLET NOW

One of the reasons why Apple is such a compelling brand and operator is that it frequently creates and builds momentum for a new market or consumer behaviour and with electronic payments has got in on the ground floor with Apple Pay.

Launched in 2015, the system has gone from strength to strength both in the number of users and the amounts being paid using the system. Apple is also able to leverage the popularity and ubiquity of the iPhone so introduce the Apple Pay system to a wider audience than it would if it was just an electronic payment company.