The U.S. Congress is preparing for the day when the use of cash is eliminated altogether in favor of wholly electronic payments. Smartphone-based mobile payments are competing aggressively with cash, and the Smart Card Alliance’s Randy Vanderhoof notes the mobile device is becoming “a new marketing channel for merchants to use.”
In March, the Federal Reserve determined that 12 percent of mobile phone users had already made a phone-based payment, while nearly 66 percent of technology experts polled by the Pew Center on Internet and American Life expected mobile payments to overtake cash and credit cards by 2020.
A recent string of congressional hearings have focused on the advent of mobile payments, with retired Atlanta Fed executive Richard Oliver supporting an open mobile wallet that could contain just as many credit cards, store cards, and receipts as an actual wallet. Still, significant security and privacy issues surrounding mobile payments need to be addressed. “The bottom line is that as the mobile payment system evolves it is important … to provide proper oversight so that these payments can be secure and convenient,” says Sen. Tim Johnson (D-S.D.). There also is the possibility of the coexistence of cash and mobile money, with one submission to the Dollar ReDe$ign Project involving bills printed at home that also could be scanned into a digital account with a phone.Back To Blog