Several market studies indicate that the use of cash is declining all around the world. A perfect example can be seen in the US, where according to the Nilson Report, only about 50 per cent of payments are still made in cash and cheques, representing a significant reduction-in 1996 the figure was 75 per cent.
In Latin America and the Caribbean, cash payments are still at about 85 per cent, far ahead of electronic ones, demonstrating that the payments industry still has a big opportunity to penetrate the market. At the same time, according to Andres Ignacio Gonzalez, MasterCard's country head for T&T, interesting changes are taking place in the industry.
"Electronic payments are gaining momentum in the region because of the convenience, safety and efficiency that they provide, and they are becoming the preferred choice for millions of consumers."
MasterCard sees a great opportunity to not only further develop electronic payment methods and alternatives to maximise credit systems, but also provide education to generate the proper use of electronic cards, which today are not a luxury, as they have become a tool to improve the management of finances.
Gonzalez says: "At MasterCard, we work to contribute to the creation of an ecosystem that accelerates financial inclusion to a greater percentage of the population, and today 2.5 billion people worldwide still lack access to financial services."
In today's economic climate, financial institutions are faced with the need to provide and expand products and services that bring added value to the consumer. MasterCard says it actively uses its knowledge and expertise of this environment to help create a future where commerce is easier, safer and smarter, in order to benefit all parties involved.
Additionally, these products and services are most effective when used by an audience that has a good understanding of the proper use of financial tools, so financial education is key.
In recent years, new technologies have been developed within the payments industry, allowing different market players to make payments in ways never before seen. And consumers are beginning to adopt them for their daily use. The popularity of chip and mobile payments all around the world is a perfect example of this.
With five billion mobile users around the world, it is not a surprise to see that the industry is developing products and solutions geared towards mobile. Throughout the Latin American and Caribbean region, consumers from Colombia, Mexico and Brazil are already taking advantage of the numerous benefits that mobile banking has to offer, such as making purchases from a smart phone, balance inquiries, money transfers, and even bill payments.
When discussing what this means for T&T, Gonzalez explains, "With a mobile phone penetration of 143 per cent, according to the Telecommunications Authority, T&T presents a strong opportunity for the development of mobile payment solutions. At the moment, MasterCard is evaluating the opportunity to expand this technology to the local market."
Additionally, chip-enabled cards have gained momentum elsewhere in the region, and this type of technology has been applied by MasterCard payment solutions in several countries in Latin America and the Caribbean, including Brazil, Mexico, Colombia and Curacao.
"Without a doubt, EMV smart cards are powerful and offer an array of benefits. Each card contains a tiny computer with the technology to make transactions faster, more secure, and with the ability to process data and run programs that add value to cardholders, merchants and our customer financial institutions.
The future of the payments industry is on the brink of its most dynamic time yet, and chip-enabled cards, along with other innovations, are leading the way," added Gonzalez.