Money transfers 'set to replace cash payments'

Online money transfers may be set to replace the use of cash, as one expert has claimed 2012 will see a move away from traditional payment methods.

In an article for Time's Techland, web, robotics, internet security and privacy writer Keith Wagstaff explained how this year will be a "pivotal" one in the transition from credit cards and cash to new alternatives.

He claimed while paying for items with notes is not likely to cease any time soon, more and more people are seeking other options.

Equally, credit cards were described as "convenient for consumers", but not "always as good for businesses".

"That's because each time you swipe your Visa or Mastercard, the merchant has to pay an interchange fee ranging between one per cent to two per cent of every transaction," Mr Wagstaff commented.

He added this may be fine for large retailers, but can be costly for small businesses, as their profit margins are reduced.

According to the technology specialist, in 2012 paying for items via smartphones will increase in popularity as people "lose their fear" of using the devices as a payment tool.

Mr Wagstaff highlighted the growth of Google Wallet as likely to help push these money transfers ahead, with banks and carriers set to compete for interest.

Google Wallet is a mobile app that allows people to pay for goods by tapping their phone at the point of sale.

It was suggested that person-to-person payments will continue to see big changes off the back of this year's rise in individuals using online accounts to make money exchanges.

As a result, cheques are set to carry on their demise, as fewer and fewer Brits use this form of transferring funds, Mr Wagstaff remarked.

Posted by Tim Pinnock

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