Currently, in the UK, only 30% of payments are made using cash, according to Quartz. So we wondered – what are the payment trends of the future? Will we all be paying using phones or other devices, or will cash and cards still rule the roost?

Read on to find out what the next generation of payments experts see in store for us:

1. Cash will disappear

Paul Amery, Founding Editor of New Money Review, predicts that “Cash will have completely disappeared in five years’ time. It’s happening far more quickly than most people expected or central bankers feel comfortable with.”

2. There will be many more currencies

Professor Chris Speed from the University of Edinburgh believes the next payment trend the world is heading towards is contract-based currencies: “Each consumer will be using at least four or five other active currencies, over and above sterling or euros […] There might be a Tesco currency, which constitutes people’s contract with Tesco and which will probably require them to share more data. With a little bit of creativity, you can actually begin to disempower the state and central banks.”

3. Unified commerce will be the new normal

Kevin O’Connell, Chief Product Officer at Trust Payments, supports the view that all businesses will move towards unified commerce experiences. “Covid-19 accelerated eCommerce adoption for businesses that pivoted to digitise their sales channels. Unified commerce is now the new normal as consumers expect broadly the same purchase experience before, during and after the payment, regardless of whether they are buying in an online or offline environment.”

4. There will be more national digital currencies

Christine Lagarde, International Monetary Fund Managing Director, endorsed the payment trend of a cashless society and governments issuing national cryptocurrencies: ” I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy.[…]while the case for digital currency is not universal, we should investigate it further, seriously, carefully, and creatively.”

5. Money will become programmable

As society becomes cashless, there is a payment trend towards purpose-based currencies that will ensure payments are only released if they are being made to a vetted and accredited supplier. An existing example is FairCoin, an eco-friendly cryptocurrency supported by an international cooperative movement as an alternative to banks. This originated in Spain to support the Catalan movement. Eric Duran, CEO of Faircoin, says: ”Our world is building an alternative economy and alternative society. We want a technology that works according to our values, so people don’t get more power over others.”

6. Banks will adopt a subscription model

Matt Cox, EY Americas Corporate, Commercial and SME Banking Consulting Leader, predicts that starting with 2021, banks will tap into the subscription model payment trend – the ability to add or remove products and services quickly, mirroring the consumer subscription model. “Banks must adopt an easy “plug-and-play” approach with price transparency in order to create value-driven relationships”.

7. Merchants will adopt zero-contact solutions

There is an increasing trend of adopting cloud infrastructure for merchants of all sizes. Nili Klenoff, Senior Vice President at Mastercard, announced their Mastercard Tap on Phone product deployment on cloud solutions as a precursor of payment trends to come: “The desire for a seamless experience is where we are today and what will continue to be the expectation for consumers and businesses in the future. We are preparing for this future by leveraging the cloud to empower every business, consumer, and financial institution to remain resilient in today’s evolving tech world.”

8. Open banking will become mainstream

Junta Nakai, Global Industry Leader of Financial Services & Sustainability at Databricks, believes that open banking is going to do to banking what open source did to software: “It will spur Innovation, render old business models obsolete, and bring transparency to Banking services […] incumbents that survive and thrive in this paradigm will need to become more innovative, data-driven, and cost-efficient. A modern and simplified tech stack will become a prerequisite to competing in an open banking paradigm.”

9. Security will continue to be a payments issue

Jim McCarthy, President of i2C, believes that security will move past being a merchant problem to become a banking problem: “as time goes on, we’re likely to see the bad guys move quickly to account takeovers, a tempting target especially given the stimulus payments that have been making their way into bank accounts.”

10. The POS will disappear

Mark Standfield, CEO of Midigator, believes that the point of sale (POS), as defined by the terminal or checkout page, is likely to disappear as we transact across phones and digital wallets, all done with contactless technology: “Best of breed technology solutions are already being produced, and those are going to grow a little bit to where you can have an ecosystem that is more interconnected.”

Gazing into the future

The new world of payments is not going to be easy for everyone. Some companies will struggle to keep up with the pace of change. But more than that, some companies are preparing for the future by adopting new technologies and finding the right partners to integrate them into their existing infrastructure.