The Trend Towards Cashless Payment

by Karl Boehm, Enterprise Account Executive, ServiceNow

The payments industry is one of the fastest moving and most exciting industries in the Financial Services market. In part, this is because technological innovation has propelled so many companies from different areas to compete, offering new services and ways to engage. It’s also because the innovations in the industry are changing our behaviour when it comes to payment methods. Find out more about some of the most notable innovations within the Financial Services market, from cashless payments to frictionless commerce.

Paying through WeChat

Last year I was fortunate enough to visit Beijing on a Global Business Assignment with London Business School. Luckily for me, most of the companies I visited were either Financial Services or Technology. Despite all the fascinating aspects of China, Beijing and the Financial Services Industry, the penetration of We Chat as a payment method stuck with me more than anything else. If you’ve not heard of or used We Chat, think of it as WhatsApp on steroids. It’s a social messaging app that has an enormous number of features. According to Forbes, users in China can use it to send monetary gifts for special occasions, transfer money and pay bills. You can even use this cashless payment app to donate to buskers.

Split the bill with Qkr

A few weeks ago, I sat in on a presentation given by Mastercard’s Chief Innovation Officer, Garry Lyons. Garry was candid in his view that ‘your guess is as good as mine’ when referencing the payment methods of the future, but he did share some great insight into some of the initiatives Mastercard has been working on. Qkr is an app that makes it easier to pay for a variety of services, primarily focused on food and entertainment. I didn’t think the ability to order, split a bill and pay via the app all at the restaurant table was particularly useful or impressive until we were told the average time that a person waits to receive a bill in a restaurant is 12 minutes.

Mirror, mirror

The ‘magic mirror’, currently being trialled with Marie Claire, might appeal more to the average consumer. Imagine walking into a changing room at a clothing store and having the mirror recognize what you are trying on. It then proceeds to calculate the prices of the items and makes recommendations for other items that might go with what you are wearing. To finish the experience, you can tap your credit card on the mirror for a totally cashless payment!

The move towards frictionless commerce

Payment providers such as Mastercard and WeChat are two examples of the industry’s move towards frictionless commerce. Frictionless commerce is a method of using data from devices, apps and websites to integrate buying opportunities simply and seamlessly into the consumer’s everyday activities and natural environments.

Tracking spending is one challenge that frictionless commerce has caused for consumers. When I used cash for purchases, I had a general money management technique that worked fairly well: withdraw cash from ATM and spend no more than that amount. Today, I quickly lose track of what I’m spending and where. This challenge has given rise to another opportunity within the payments industry. Several companies are trying to create a single dashboard that tracks your payments across all payment methods. Barclaycard, amongst others, allows you to categorise your spending. This data is now being opened up to third parties as part of PSD2 (open banking) so we can expect to see more offerings in this space.

As much as I enjoy the convenience of cashless payments, I feel uneasy losing sight of what I spend. For the next week I have little choice but to not use cash as the ATM swallowed my debit card last night. Perhaps this is a sign.

mm
ServiceNow Blog

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