Michael Shustek on the Future of Payment Methods

Payment methods have been shifting ever since the introduction of credit in the early 20th century. Now, when nearly every adult has at least one credit or debit card and certain apps can connect to a bank account for ease of spending, the process of making a purchase is changing. What effects this shift will have remains to be seen.

Online Retail
The rising prominence of online shopping renders the exchange of physical cash nearly obsolete. With online exchanges, cash is rarely, if ever, exchanged directly; more likely, the funds are transferred indirectly from one account to another, meaning the parties involved are more distanced from the process than they would be had they conducted the exchange in a brick-and-mortar store.
With more individuals using the Internet to buy everything from clothes and groceries to automobiles, the relevance of money in a physical state seems to be diminished.

App Pay
Several companies have created apps that enable the user to connect their bank account and pay for purchases both online and in-person. Those like Apple Pay or Google Pay enable the user to connect credit cards, debit cards, and more and respond to a scanner at a physical location to transfer the set balance. Some apps utilize QR code technology to accomplish the same thing. Apps like Venmo, Paypal, and Square Cash allow users to instantly transfer funds to other users, making repayment simple and hassle-free.

Cashless Stores
In large cities, some businesses have decided to become cashless, meaning they will not accept cash payments. Instead, patrons are encouraged to use cards or payment apps to complete their purchases. Business owners claim that cash is a source of wasted time; rather than forcing employees to spend hours counting and sorting physical bills, a cashless store eliminates the time spent by higher management on menial tasks and allows them to pursue more important goals such as training employees and engaging with patrons. Cash also causes delays in service and checkout as patrons spend time sifting through the bills. Going cashless could minimize waiting times and streamline the purchasing process.

While there is some controversy regarding the notion of going cashless, payment methods will continue to change and evolve as societal demands shift. For now, many businesses seem inclined to continue accepting cash payments, but others are limiting their options, accepting only exact change or none at all. This conflict in payment methods shows that the commercial market must consider change if it is to appeal to shifting societal desires and practices.