In a recent Financial Times post, British columnist John Gapper claimed that the U.S. “lags behind badly in the basic infrastructure of retail banking” after receiving a “quaint” check for one dollar from a U.S. bank.
The online payments and commerce gadflies pymnts.com rushed into the fray to defend against Gapper’s charges in a fun-to-read post titled “Does the US Really Trail the Rest of the World in Payments Innovation?”
As the only full-service point of sale provider — from software development to franchise incubator to ongoing support — part of Sintel’s commitment to our customers and industry is to share news, ideas and information. Whether you’re a first-time franchise hopeful, a small business owner or an established chain, it’s always smart to stay on top of payment technologies to achieve financial success.
Here are some of the highlights of the pymnts.com post in defense of the bright future for American payment system technologies:
• Yes, we still use personal checks here in the U.S., but check usage is rapidly declining.
– According to the Federal Reserve, in 2000 checks were used in approximately 40 billion transactions. By 2012, that number was reduced to 20 billion while at the same time the economy was growing.
– Americans name checks as their least favorite payment method.
– For retail transactions, by number: 7 percent by check, 40 percent cash, 17 percent credit, 25 percent debit, 7 percent electronic and 4 percent other.
– Debit cards, invented in America but more quickly adopted across the pond, helped bring the demise of check usage.
– Other bank-driven and third party innovations include: clearXchange, PayPal, Square Cash and Google. Paym is a highly popular mobile person-to-person solution launched in the UK.
• On the corporate side, approximately 70 percent of all payments are made by check, ostensibly because until recently, alternatives haven’t been all that compelling for either buyers or suppliers.
– For suppliers, paper check alternatives have been considered too expensive.
– The big business-to-business buyers have been moving money digitally for ages, but most other corporate buyers “just want their stuff,” although now there is a visible shift away from checks to digital payment systems innovated by PayPal, NvoicePay, Intuit, Ariba and Dwolla.
• Tokenization and end-to-end encryption are available now and igniting mobile payment methods; witness The Clearing House, who is developing its Secure Cloud technology to tokenize data and pass randomly-generated numbers, or tokens, during transactions.
• In the post, pymnts.com notes that beyond cash and paper checks, none of today’s payment innovations came from the government:”Not the payment card which has helped make payments electronic and provided an essentially global method of payment; not the ATM machine; not the incredible mobile money schemes that are providing financial inclusion across Africa; not PayPal or another of the payment methods that enable digital commerce.”
• “The banks have actually held their own in some pretty important areas where innovation really makes a difference and solves some real problems for consumers,” writes pymnts.com, defending the financial institutions. “Take online banking, mobile banking, digital P2P – all innovations that banks developed here in the U.S., delivered and kept secure; innovations that consumers actually use.”
Read the full pymnts.com post here.
For another overview into the fast-evolving payments landscape, check out our related post, Safer Consumer Transactions May Be In The Cards.
Just as we share our vast point of sale experience and expertise with startup owners in order to help them make the best decisions from the very beginning, we at Sintel Systems are happy to share articles, advice and commentary about retail point of sale and security technologies.
Whether you’re a first-time franchise hopeful, a small business owner or an established chain, it’s imperative to stay on top of the latest payment technologies to achieve financial success.
If you are interested in learning more about Sintel’s point of sale (POS) systems and how our knowledge and support can impact your future success, call us for a complimentary phone consultation.
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