F.O.T: the Future Of Travel – PART #2 – Contactless payments post Pandemic
Series: Future of Travel
- F.O.T: The Future of Travel – Part #1 – Masks and Social distancing
- F.O.T: THE FUTURE OF TRAVEL – PART #4 & #5 – Say goodbye to the A380 and B747’s
- F.O.T: the Future Of Travel – PART #2 – Contactless payments post Pandemic
- F.O.T: the Future Of Travel – PART #3 – Temperature testing and COVID-19 instant testing at Airports
Content of this Post:
Cash is king no more
My parents were credit card free right up until the 21st century. In fact, my dad, who died in 2003, I don’t think ever had a credit card. And my mum only ever used hers to pay for things like electricity accounts. If you went out with her to lunch or dinner, there would be a wad of pristine green AU$100 bills emerging from her purse at the appropriate moment. My mum always ‘treated’ if you went out with her.
Store charge cards were quite another thing, not really credit, just convenient.
Call me a dinosaur, but I was brought up with cash. If you didn’t have the money, then you didn’t get whatever you wanted. The exception was property, where it was OK to borrow from a bank.
In those days when I was short, I survived on borrowing from friends or hire-purchase and lay-by. Remember lay-by?
Of course, now, I have multiple points earning credit cards, debit cards, and charge cards, but I still prefer to conduct my day-to-day expenses, my coffees, my lunch, my incidental purchases at the local shop in cash.
Well that’s all changed.
#2 Contactless payments – COVID-19 has made contactless payment the preferred kind of transaction. FinTech will remove the final barrier by reducing fees, and improving exchange rates to make credit card payments efficient.
Going Cashless with COVID-19
With COVID-19, most retailers prefer contactless payments, and I now have my preferred credit cards all set up so I can pay with my Apple Watch or my phone.
My father always said you should never leave the house without cash in your pocket, even when you think you don’t need it, like going to the gym or going for a run. Now, my two essentials are my phone/watch and my keys. No cash anymore.
Up until now – well, really the future, when we can travel internationally again, cash overseas although cumbersome, and subject to ridiculous fees and bad exchange rates, has been king. All other forms of overseas payment, travel cards and the like have involved exorbitant fees, and when that’s not the case, an exchange rate that builds in an expensive profit margin.
I think this will change. Cashless payment will be the norm, and I hope (although I’m not optimistic) due to competition and the new FinTech outfits, overseas payments and exchange rates will become more efficient and fees, charges, and exchange rate differentials will become slimmer.
This is really an evolution and the pandemic has just quickened the pace of change. Cash has been moving to a minority form of exchange for a while, and COVID-19 has just given it a bit of acceleration. Fortunately, we are also at the beginning of a FinTech revolution that will amongst other things, shake the credit card industry to the floor.
Now if you are a points and miles fanatic, this might also have a gigantic downside. However, I think that there will always be room for product use incentives, and in this context, there will always be the need for an incentive to tempt consumers to use your product over the other guys.