Cash holds against rising tide of mobile payments

Cash may still be king, but it is certainly feeling the heat from a fair number of challengers. The biggest among them at the moment is mobile - specifically, mobile payments made via smartphones and tablets.

These mobile payments are currently in a massive growth phase, as new competitors appear on daily basis to challenge the top dogs. There's Apple Pay, Samsung Pay and Android Pay - just to name a few - and every few months, a new tech development or news story breaks that pushes these services further in the right direction.

Of course, this has many people arguing that the end of cash is upon us. But is it really?

Mobile is trendy, but cash reigns supreme
The answer, at the moment, is no. Mobile payments have not yet usurped cash at points of sale across the country. This is based on a research paper and press release from the ATM Industry Association, in conjunction with consulting firm Tremont Capital Group. 

The results of the research found that mobile payments only make up a minor fraction of total in-store payments. To find this out, Tremont Capital Group looked at two major mobile payments - Apple Pay and Starbucks' solution. For the coffee chain, 20 percent of its in-store transactions are completed via mobile payments. This is high for retailers, due in part to the fact that it is only a solution for one specific company. On the other hand, Apple Pay is compatible at over 700,000 retailers. 

Based on their information, the ATM Industry Association is comfortable calling the future of mobile payments promising. However, it noted that only a small percentage of in-store purchases are made via mobile.

Mobile payments are trendy, but not yet commonplace.Mobile payments are trendy, but not yet commonplace.

Mobile may not be competing with cash
The other interesting point from the research was about the future of mobile payments. On the surface, it seems that cash will be the first to go, since it is the most antiquated payment method. That may not be true, though.

According to the ATM Industry Association, the real competitor to mobile payments is actually electronic payments. Over the next five years, the researchers expect mobile payments to eat into the market share of payment methods that don't include cash. 

Overall, cash is likely to remain a fixture of payments for some time to come.

"An analysis of 30 countries during the five year period 2009-2013 showed an average year-on-year increase over this period of cash in circulation of 8.9 percent, compared to economic growth rates below 3 percent," concluded Mike Lee, CEO of the ATM Industry Association. "In truth, cash use is more robust and mobile payments less stellar in growth than current conventional wisdom might suggest."