OPINION: Are you ready for a future without cash?

If current technological trends are anything to go by, physical money may soon become a thing of the past.

Jack Dorsey, the man who came up with the idea for twitter, is behind a new product that he believes will revolutionise the way that small business owners operate.  The device, called simply Square, enables the retailer to turn their iPhone into a credit card swipe point or their iPad into a fully functioning till.

Over in the United States this device has become hugely popular with many cabs and local shops using their iPad as their primary or even sole source of payment acceptance.  All you have to do is sign up on their website and they’ll send you one for free.  The only payment is a 2.75% charge on each transaction, which is similar to credit card charges on regular machines.

Unfortunately this device is not available in the UK just yet although it may be soon.  Long ago we left magnetic card strips behind in favour of the far safer chip and pin cards.  And now we are moving onto the next wave of technology – NFC cards (Near Field Communications) otherwise known as contactless payment technology.

The Post Office and many other places have already started accepting Contactless Payments and by the end of 2012 there will be over 150,000 outlets across the UK with contactless terminals.  As there is growing consumer awareness there will be growing demand for this technology and with nearly 20million contactless-enabled debit and credit cards in UK circulation from Barclays alone it might be worth thinking about installing it in your store.

Here’s what Richard Armstrong, head of UK payment acceptance at Barclaycard has to say about the technology:

“Contactless card and mobile payments enable retailers to take payment quickly and are ideal for stores where the majority of payments are £20 and under.

“The vast majority of contactless terminals installed so far by Barclaycard have been in independent or small chain stores. For many small businesses, contactless terminals can be installed without additional cost as part of the normal rental agreement. What is more, the payment acceptance cost for contactless takes into account that the technology is designed for lower value transactions.

“Consumers and retailers are naturally wary of new payment technology but we have put in place several measures to allay concerns. There is a spend limit on single transactions, and people can only make a limited number of consecutive contactless payments before being prompted for their PIN. To make mobile payments, customers need to upload credit to the app, by entering a PIN. Only a maximum of £150 can be held on the phone at a time. Furthermore, retailers won’t lose out in the unlikely event of fraud, as Barclaycard’s contactless transactions benefit from the same 100% fraud guarantee as standard transactions.”

The advantages of contact-less payment technology:

• >Satisfying consumer demand
• >Outlets benefit from shorter queues
• >Faster customer turnaround
• >Fewer abandoned purchase
• >Reduction in cash handling / banking costs
• >Increased average transaction value