Digital Wallets Ushering in the Demise of Cash

Businesses are well aware of the inconveniences of cash because it can be lost, stolen, damaged and requires more effort to use. The introduction of credit cards reduced cash usage, but it didn’t get rid of it completely because a transaction limitation means having cash in hand for small purchases. So businesses wait patiently for the technology that will, once and for all, eradicate cash from the market place. The end might be here sooner than later, because new technologies are targeting all transactions aggressively and the electronic payment industry is trying hard to displace cash with a wide range of solutions. One of the technologies making the push is digital wallets, offered by companies across various sectors.

The reason digital wallets can realistically displace cash is because the technology can deliver a wide range of value added services with location, social features and identity management in one small device. A company that is getting recognition for its digital wallet is Wocket, it is implementing all of these features and more, which will essentially allow the user to get rid of their wallet if they desired.

Because the technology has many different moving parts, there haven’t been many companies that were able to bring them all together in an easy to use platform. The Wocket takes the merchant and consumer in to consideration and provides a platform that is essential for wider acceptance. NXT-ID, the company that makes the Wocket, also came at the right time when advances in biometric and smart technology development were entering the marketplace. By incorporating the security features, it was able to overcome one of the biggest issues consumers have with digital wallets.

The next obstacle the Wocket had to overcome was the need to have a smart device in order for the wallet to work. Opening an app on a smartphone or tablet, entering a password and/or swiping the device was too inconvenient for many people when you could just hand the cashier cash or a credit card and be done with it. The Wocket doesn’t need a secondary device to work, so it can be used as a standalone device.

A white paper released by Mahindra Comviva and Ovum (News - Alert) Consulting highlighted the growth of digital wallets as a global phenomenon across developed and developing countries. As the report points out, the segment is creating a land grab scenario in which virtually everyone seems to be offering or has plans in development to provide some form of a digital wallet. Apple (News - Alert), Google, Amazon, all the major telecom operators, banks, emerging companies like Square and many others are addressing the ecosystem. This begs the question; does cash survive?

“The potential for digital commerce and payments is extremely promising. However, the true value of digital wallet goes beyond the transaction, As the customer progresses through a transaction, service providers for instance, can leverage customer location and transaction data to ‘listen and respond’ to a customer’s needs in real-time– e.g. deliver personalized offers,” Srinivas Nidugondi, SVP and Head, Mobile Financial Solutions, Mahindra Comviva, said in a statement.