The Future of Convenience is Cashless

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The Future of Convenience is Cashless

HERTFORDSHIRE, U.K. -- Crumpled bills and coin counting will be a thing of the past as electronic payments take the place of paper money for small purchases at convenience stores, according to international food and grocery research firm IGD, headquartered here.

The company's new report Global Convenience Retailing 2007 found during the next five years, the world will see a significant increase in the use of electronic payments and ordering, to the point where cashless "wave and pay" cards and mobile phone-based electronic payments become ordinary.

Japan is leading the world in cashless payment technology to satisfy customers' "requirements for immediacy," and the rest of the world will follow, according to Adrian Williams, senior business analyst for IGD. "Convenience shopping is becoming more complex as operators evolve to meet changing consumer priorities,'' he said. "Immediacy of purchase is becoming a key consideration.''

Advances in technology are allowing retailers to offer more add-on services, he added.

"Many convenience stores could evolve into local community service 'hubs,' offering everything from grocery products and collection points for online orders to services from noncompeting local stores," he said.

In the United Kingdom, Mid-Counties Co-Op is testing biometric finger readers, the report stated. Customers simply press their finger against a reader, and a designated account is automatically debited. According to the co-op, the finger scan payment is 20 percent faster than standard card and pin verification. In addition, Barclaycard, Transport for London and Visa teamed up to combine credit, debit and Oyster card functionality on one card in December, allowing London travelers to "wave and pay" for train tickets, coffee and newspapers.

Taiwan's AS Watson introduced Wave Visa, which pays for purchases when customers move their Visa credit card close to the card reader. The process is 2.3 times faster than using cash, according to the report.

In Japan, NTT DoCoMo, a leading telecoms company, enabled its Osaifu-Keitau mobile phones with contactless cards in 2004. The company's mobile phones were used for electronic money, credit card payments, membership card identification and as airline tickets.

"Technology has the potential to redefine convenience retailing. This is great news for consumers, and presents significant opportunities for retailers nimble enough to keep pace," Williams concluded.