Will Apple Pay Crush Cash And Where Is The Payments Experience Going?

Apple Pay is set to release later this week, joining the ranks of Square, Coin, Venmo and other players looking to cut paper currency out of the equation.

But will digital currencies be able to do so?

One main reasons business owners, especially bars, like to run a cash-only business is to avoid processing fees that can eat away as much as 3% of already small profit margins.

Kenneth Nye, owner of Ninth Street Espresso in New York City, told NBC News “It really does put pressure on businesses.” Nye is right when it comes to businesses who sell products that cost as little as $3 and receive charges from a credit card companies, which often include a percentage of the cost of the item plus a flat fee.

Nick Holland, senior payments analyst at Javelin Strategy & Research stated, ”Cash is declining, but after debit and credit, cash is the primary way people pay at checkout.” Holland also stated that cash still remains as a preliminary transaction form and will remain so for the foreseeable future.

For merchants, cash is an ideal form of payment simply for the fact that cash comes with no extra fees. An added perk is that merchants then do not have to deal with credit card companies when a stolen card is used in their store. Bloomberg reports that Apple Pay will make money by taking a cut from the banks.

“In many ways, Apple Pay is nothing new.” – Holland. He then referred to Google Wallet, which let people do the same thing three years ago but then went on to say “But Apple could normalize mobile payments and bring it into the mainstream.”

While businesses are on the road to making spending money easier than ever, even in the future, Apple Pay may seem like an inconvenience.

Apps like Uber, which charge clients after leaving the vehicle, are moving payments into the background and bringing more attention to the retail experience.

For additional news on Apple, visit the PYMNTS.com Apple Pay EcoSystem.