Digital Currencies Get Smartphone Boost

Digital Currencies Get Smartphone Boost

So-called digital currencies are set to be revolutionised through new mobile payment transfers, an international summit on retail payment systems has heard.

According to the 21st International Payments Summit, 63% of delegates believe real-time payment services are the key ingredient for future growth.

Mark Hale, head of payments and transactional banking at KPMG Management Consulting, said: "Digital currencies such as Bitcoin may not yet be the mainstream money of choice, but their rise in prominence and growing acceptance amongst merchants.

"And payment providers is the clearest sign yet that consumer demand for simple and swift transactions is forcing a rethink about the way money changes hands."

"It's also why the 2014 introduction of peer-to-peer bank transfers by mobile could be a real game changer."

Despite acknowledging the role that digital payments play in generating an immediate transfer of funds, 24% of delegates at the summit believe existing "legacy systems" mean that changes to payment structures can be difficult or risky.

A significant proportion - some 20% - of those quizzed also believe the cost is prohibitive, while almost as many say then cannot dedicate sufficient resources to deliver the required change.

KPMG research also revealed that consumer preference for notes and coins has dropped over the past year, as smartphone ownership rocketed.

In 2012, 14% still claimed traditional coinage would be the 'payment instrument' of choice by 2020 - but this figures has dropped to just 8%.

In contrast mobile phone ownership has risen to 49% - up 3% - and digital wallets are now predicted to dominate by 23% of respondents.

According to the data, the face of the payment marketplace will change unless current providers adapt to, and adopt, new technology.

Mr Hale added: "Technology may enable change, but revolutions happen because of changes in behaviour.

"Over the past few years we have begun to see these changes take place and it is no longer a sweeping statement to suggest that money is about to change forever.

"It might not be tomorrow, but the direction is set and it is only a matter of time and circumstance before cash is materially displaced."