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This story was printed from silicon.com, located at http://www.silicon.com/

Story URL: http://www.silicon.com/financialservices/0,3800010322,39156353,00.htm

Cash to become a thing of the past?
Ch-ch-ch-changes...

By Dan Ilett

Published: Friday 10 February 2006

Half of European consumers believe cash will be almost obsolete within 10 years, a study suggests.

Out of the 3,000 debit card holders surveyed, 52 per cent said Europe will be cash free by 2016 but 48 per cent said they would still carry paper and coin currency.

Eric Tomlinson, senior vice president of MasterCard Europe, who commissioned the study, said: "Our research also shows that eight out of 10 still carry up to €50 in their wallets on an average day. Cash remains the fall-back position for too many of the Europeans we surveyed.

"The challenge the payments industry faces is increasing both merchant acceptance and the level of consumer comfort with using debit for lower value transactions, to the point where people don't need to carry cash."

The survey was carried out by KRC Research – a sub-company of MasterCard's UK PR company.

MasterCard is currently pushing its contactless payment product, One Smart PayPass. Using a card or token, consumers can tap a pay point to pay for goods.

Last year one silicon.com reader said people who carry contactless payment cards could be putting their money at risk.

He said: "This introduces a whole new area for fraud - why steal something when you only have to stand within reader distance of someone's wallet or purse?

"Just think, there you are, crammed on the tube - how many of your fellow passengers are surreptitiously querying your contactless credit card? Breaking the encryption of a popular credit card would seem to have a certain potential payback - enough to warrant significant effort I would have thought."