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Cash No MoreMany of the credit card companies are coming out with cashless payment systems that will work a lot faster than standing there counting out change. For this very reason cash could become almost obsolete in numerous stores for the future. It is of course a logical step in that MasterCard is showing an increase in transactions from debits and credit cards. The preferred method for purchasing items in stores is no longer cash. According to a study done recently eight out of ten individuals will use their debit cards more often then they will cash. The reason they gave for this use was the convenience. Credit cards and debit cards are more convenient than carrying around cash, so cash may be doomed. Two out of three people in the study also said that they feel more secure using their debit cards. If the new cashless payment systems take hold as expected in the new future we could very well be seeing the end to cash. The Oyster Card is just one of the cards currently being advertised for a cashless system and numerous London retailers have already taken over the system. How the system works is that the person just scans their card on the credit card machine without it being swiped or waiting for a receipt. The time you are in the store is lessoned and the payment is taken. Currently the system is only working for anything under ten pounds. The stores are still requiring a signature for anything that is more. The card is just touched to the machine, a quick readout is made, and the goods are handed over as a debit is posted on your bank account. Barclay card also has a pay and go card. Their card works the same as the Oyster card in that you have three steps for the process. The card is a One Pulse in which you scan the card on the machine as the consumer, and then “wave and go” according to the news and company. In other words you no longer have to worry about the bulk of money and coins weighing you down. You don’t even have to worry about having other cards in the wallet. It is a simple innovative card system that allows you to purchase what you need in a few minutes and walk out the door. There are a few things that will hold you back with this payment system for the moment, but in the future it could be even simpler. Right now the Barclay card works just like the Oyster in that anything over ten pounds will require a signature. The pay and go card can also be used for the Underground payment system being installed by Oyster as well as for other travel. The great thing about the new cards is the fact that they can be used like regular credit cards as well. Instead of having to have a few different cards if the purchase is over ten pounds, you can still use the card. The cashier will just have to swipe it in the machine like a normal card and wait for you to sign. Already it is being seen in London. In fact more than 1000 shops are already using the system. There are also restaurants and cafes such as Krispy Kreme, Coffee Republic, Threshers, Yo! Sushi, and more that will take the revolutionised credit card. In today’s society when time is of the essence and you can’t waste a minute waiting for your payment the new pay and go cards will make it all the better. It is quite simple when you think about it. When you need a quick snack while, you are at work or on the way to work you can simply stop in one of the stores that takes the card. Then you order, pay and are gone in less time. You could in fact be on time for work rather than late with this system because it is so simple, where as other card systems take longer. There are several reasons a consumer would want to use the card system, but what about the actual retailers? Why do they find the system so much better? It is really easy to understand when you think about the lunch rushes at some of the shops. After all there is a long line of people waiting to get food, and the line is usually longest while they wait for the payment to go through. With the pay and wave cards the customer is immediately paid up and on the way to moving towards getting the food rather than waiting two or three minutes for someone to find the cash. The system quite simply makes the line move faster. There are some pros and cons with the pre paid wave and go cards that are available. The pros are less cash to carry, less bulge in the wallet, and less time spent digging for payment. The cons are that you would have to constantly keep the card going. You see the prepaid cards require that you put money in the account before you can use it. So if you use it a lot say every day you either have to put a huge balance on it, if possible, or you have to keep placing money in the account. This can be irritating to some. The Barclay card is one of the best on the market for the impatient consumer. This card started it all really. There will be others to follow in the scheme such as the PayPass system that is already being started by MasterCard in London. The MasterCard system has not been placed in the rest of the UK, but that will be coming very soon. The name of MasterCard is already being used in the homes of many as the One Pulse. The fact is the PayPass is already known to over 19 countries even if the UK does not have the system launched yet. PayPass customers will be able to just touch the card to the reader and the money will be deducted like the other systems that are already in place. There is no need to sign a name or enter a pin. HSBC and other retailers like McDonald’s and Coffee Republic have been using the PayPass system already. The next type of card you will have is the “wave and go” credit and debit cards. These cards are quick, and there is no need for a balance to be placed on the card. There is a downside to this system though. Many of the shops have yet to accept the “wave and go” cards, except for the MasterCard, so it is still a little difficult to get them accepted where you might shop in the UK. These cards are better than the Prepaid option because you can use the card for any purchase. With the prepaid cards you have to have the right balance on the card to buy something that is more expensive, such as a television or gaming system. If the cash is not there you can’t use the card, but with the “wave and go” you don’t have to worry about that. This type of card is set up like any other credit card on the market. Prepaid Visa and Master Cards are the best cards for children on the market at the moment. While many adults don’t like the option for themselves it does have a few pros and cons. First it is great to keep tabs on spending no matter who you are. This is one of the reasons a lot of parents have them for their children. They can make sure the child is not spending any more than they should be. There is of course a downside in that it can be expensive. There is a transaction fee for every time you use the card. Gift Cards have also been on the market for a long time. These cards have been quite the hit in the UK as well as other parts of the world for Christmas, Birthdays and other shopping needs. The reason for this is the use. If you don’t know what to buy a person you can get the gift card to their favourite store and make them happy. There are other reasons such as the alternative to credit or debit cards. For example children may not be able to use a debit or credit card, or you may not have the appropriate means to get a card. This means that you still have an alternative to cash in the gift card. They can be a little expensive to use though. Some of them are rechargeable for a fee. You also have to pay the tax to load them in the first place. So there is a little bit of a decrease in your money when you use them. For those who still like to use cash you may discover in the near future that cash is no longer accepted. The credit cards, especially the touch and go cards are becoming more popular as the shops and other locations find that time is on their side in the payment department. They are almost guaranteed the payment where as cash can still be forged. With the many pros for the credit cards it seems that cash will not be accepted in the near future, at least according to some. There are still going to be cons with the credit cards for both sides that could turn the tide. Financial News March 2008 |
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