Article on CBC: Visa to launch global cellphone payment system
Well, finally something comes along that has the potential to replace cash for all transactions. Interac and credit cards work to get rid of most cash transactions, but what about person – to – person transactions? Nothing beats cash right now for transactions between individuals. Yes, you can do it over a computer, but it is a pain compared to just handing some cash over.
Cellphones, that’s another story. It’s pretty much getting to the point where pretty much anyone could have a cell phone, and having it on you is the point of the thing, so rather than having to pull out $10 for that funky lamp you want to buy at a garage sale, you’ll pull out your cellphone instead.
Now, as to if this will catch on, well, it depends on how VISA pulls this off. There is little detail right now as to how it works, but I can tell you right now what the criteria for success will be: It’s going to have to be universally usable – from vending machines to car dealers. It’s going to have to be fast and easy. I shouldn’t have to wait even one minute to confirm payment before handing over the goods to someone I’m selling something to. Lastly, it’s going to have to be cheap. Very cheap if I’m using it to buy a pop, cheap if I’m using it to sell something – similar to the three cents on a dollar a typical merchant pays when you whip out your VISA right now.
We will see. I don’t expect cash to go away tomorrow, but I could see cellphone payment putting several nails in the cash coffin if it’s done right.