In the run-up to Apple’s big launch event next week, there’s a great deal of speculation that part of their announcement next week will be about a mobile payments system. There have been a lot of posts about their development of partnerships with Visa, MasterCard and Amex for an NFC (?) system. A little hard to believe that Apple would now adopt NFC, given their championing of BLE.
If this proves to be the case, the reason might well be tied into the subject of this post, which is the second reason why it’s so hard to disrupt, or displace, cash.
There’s simply too much infrastructure behind cash.
Think about all of the day-to-day infrastructure around cash which would either be made obsolete, or have to change to enable a cashless world.
- most of the millions of parking meters would have to be changed
- just about every retailer would have to scrap their cash register
- the vending machine industry would endure wholesale change
Most of us don’t think about the costs and inertia involved in large scale changes in these types of systems, but they are huge.
Just look at the continuing battle behind the costs of upgrading the US card payment infrastructure to move from mag-stripe cards to chip cards. Based on the cost of having to upgrade every PoS terminal and the training of employees and communications to customers, merchants have fought these costs as long as possible. Only the stance by the payment providers on liability for fraudulent transactions, combined with the high visibility of the Target and other retailer breaches, has forced their hand.
If Apple adopts NFC, a major reason will likely be because there are more enabled NFC payment terminals already deployed (IOW, more available infrastructure) than BLE as well as the software systems to support payments.
And while cash may be old fashioned, getting rid of it would be very expensive.