E-commerce, mobile-commerce, social-commerce and more recently voice activated commerce
Over the last decade retail has had to face more disruption than any generation before
But with our shift towards a cashless economy accelerating, is the biggest disruption to commerce closer than you might think?
Right now crypto-currency might seem a little out there, but the benefits to both consumers and retailers alike could be huge
Here in Australia, cash as a share of payments has fallen from 69% in 2007 to just 37% today
In the same period, card payments have doubled from 26% to 52%.
“Cash is no longer king,” said CommSec chief economist Craig James. “Use of both credit and debit cars is soaring with more people using the cards for small purchases.”
The rise of mobile payments, card-only shops and lower interchange fees will further ignite the cashless economy
From Cash-Only to Cashless
For the first time small businesses can take advantage of the benefits cashless brings
At Spice Alley in Chippendale, Sydney, all the six Asian food vendors run a card only economy. When you walk in, a sign declares: “Spice Alley is cashless. Tap and go cards accepted or get a reloadable kopi-tiam cash card at the pay station”.
So as we accelerate towards a cashless economy, money itself transforms from a tangible asset to a value exchange of binary numbers
Enter the perfect conditions for crypto currency
The best known crypto-currency, Bitcoin, is an alternative kind of currency. It’s entirely digital—there’s no paper money, there’s no coins, nothing physical, not even a plastic card for your wallet.
Your bitcoins are stored on your computer or your phone.
This arrangement has some compelling advantages over traditional currency or credit cards:
There’s no bank or credit-card company involved, no middleman who can charge fees. So consumers and retailers both finally win
The entire Bitcoin banking system is a global peer-to-peer network, running Bitcoin software.
The Japanese government recently recognized the cryptocurrency Bitcoin as a legal form of payment a legal form of payment leading to a jump in the price of Bitcoin and opening up conversations about the future of the currency in international trade.
Now, with the legal status of Bitcoin firmly established in the country, adoption of the currency is expected to explode.
Local Payments Innovation
Locally the RBA is preparing to roll out its $1 billion real-time payments platform this year. Under the new system, BSB and account numbers will be ditched in favour a uniform, simplified electronic payments system.
The shift will mean consumers and businesses are able to transfer funds between each other instantly, eliminating up to three days’ waiting time that occurs when people transfer between banks and any delays on public holidays or weekends.
Once the new system is switched on, Australia will leapfrog other nations and join only Sweden and Mexico in having “real time” payments.
Crypto Currency In RBA’s Sights
The RBA has also stated its interest in the blockchain technology that underpins controversial crypto-currency bitcoin
As far back as 2015 Reserve Bank of Australia governor Glenn Stevens said it was important for banks to figure out how the technology could be used to create broader efficiencies in the financial system.
Whether it’s bitcoin or not remains to be seen, but the speed at which we’re moving towards a cashless economy means crypto currency may be here sooner than you think