The new payment app Paymit is taking over the market – how much longer will we need cash?
SIX, UBS and Zürcher Kantonalbank are launching the first Swiss-wide payment app that is open to all banks
Paymit turns your smartphone into a wallet. At the end of May, SIX, UBS and Zürcher Kantonalbank launched the first payment app on the Swiss market where everyone can take part. The innovative payment app allows participants to transfer money quickly and securely to friends and family members and receive payments throughout Switzerland – from smartphone to smartphone. What makes Paymit so special is that it's the first payment app that was developed as an open system and therefore can be used by all banks (negotiations with other potential banking partners are ongoing).
Paymit is quicker than cash
Next step: P2M
The first phase of Paymit consists of payments between private individuals. The establishment of a Paymit community is the basis for gradually building up acceptance among retailers. Use at points of sale, for in-app payments and in online retail is in development. "One of Paymit's goals is to replace cash. With that in mind, in a first step, we will introduce Paymit as a method of payment for small amounts at unstaffed points of sale or with merchants. Collaboration with a broad base of retailers is the foundation for establishing Paymit in the market in the long term," says Pedro Deserrano, Chief Marketing Officer SIX Payment Services.
Paying with the app is fun
Paymit is fun to use! For example, you have just finished a delicious meal with friends at a restaurant, but you don't want to burden your server with splitting the bill. Paymit does the hard work for you – one person pays, and the other guests can transfer their share in a flash. A group of nieces and nephews wants to share the cost of a gift for their favourite aunt. The individual amounts are transferred in seconds – at your convenience by smartphone from the comfort of your sofa or from the coffee shop.
Does the world still need cash?
Given the wide range of new payment options available, the question begs itself: do we really still need cash? A short trip around the globe demonstrates people's varying preferences and habits when it comes to making a decision whether to pay with cash or without. Cash (still) has many friends, but it also has its fair share of enemies. For example, some politicians, central banks and economists are campaigning to get rid of cash since this could help reduce crime and curtail transactions on the black market. More and more countries are now placing restrictions on using cash and giving preference to electronic transactions. The Danish Central Bank, for example, wants to discontinue minting notes and coins beginning 2016.
In Swedish churches, collections have gone cashless
Swedes have long espoused credit cards as one of their preferred means of payment. Even churchgoers have started to go cashless during collections, and homeless people selling street papers have embraced progress and now offer their customers the option of paying and making donations electronically. In the UK, cashless payments overtook notes and coins for the first time in 2014, with 52 percent of Brits having made cashless payments last year.
In Africa, the fact that many people do not have access to a bank account has worked in favour of the cashless revolution. In remote areas, people often do not have a bank account, but do have Internet access. In countries like Kenya and Uganda, salaries and power bills are transferred by smartphone. Experts forecast that there will be 350 million Internet-enabled mobile phones in Africa by 2017. Worldwide there are now around 250 million active mobile payment users; in 2014, mobile commerce transactions amounted to 450 million US dollars (figures: Gartner and Juniper Research).
Germans like cash and the sound of coins jingling in their pockets. In a survey, 74 percent of German nationals said they did not want to do away with cash; it gives them a feeling of security. Every German carries an average of 103 euros around with them in cash. However, there is some catching up to do on the technical side, with only one in four checkouts technically capable of accepting mobile payments.
For more information on Paymit, read the interview with Pedro Deserrano below.