Editor’s Note: Article updated to note that MintChip is a digital replacement for cash linked to a country’s fiat currency.
While the possibility of a cashless future is gaining speed, nanoPay know that more needs to be done before mobile payments become the people’s choice when purchasing goods and services.
At the beginning of the year, Toronto-based loyalty and payments platform provider nanoPay acquired Canada’s MintChip, a digital currency that provided an alternative to bitcoin, which was developed by the Royal Canadian Mint.
At the time, Laurence Cooke, nanoPay founder and CEO, said that digital cash would deliver the shift from cash to a cashless society.
Now, though, nanoPay faces competition from Apple Pay, a mobile wallet that recently launched this year in Canada, according to a report by The Star. In 2014, Apple unveiled their mobile wallet; however, the report states that the adoption of the wallet has not been as successful as it was previously thought. Furthermore, a Crone Consulting survey from March found that only six percent of mobile users eligible for Apple Pay actually used the wallet in the U.S.
It seems that the main issue is down to the fact that companies such as nanoPay and Apple Pay need to convince consumers that a mobile wallet provides more benefits compared to a physical one.
Despite the challenges, though, technology companies big and small are keen to disrupt traditional banking. According to The Star, the traditional banking market is expected to grow to $141 billion by 2019 compared to less than $5 billion in 2014.
NanoPay Faces Challenges
In an interview with CCN earlier this year, nanoPay founder and CEO Laurence Cooke spoke about how he believes that digital currencies will change society and the financial system, from the unbanked to major financial institutions around the world.
Unfortunately, nanoPay faces tough competition from bigger companies such as Apple Pay simply because it doesn’t have the recognition that the bigger companies do.
One way that nanoPay and MintChip are aiming to tackle the extra step that users will need to undertake is to offer an alternative to cash, credit and debit payment types by offering users reward or incentive programs.
Keeping up with a Changing Industry
Before nanoPay can compete on a large scale it first needs to perfect its product to keep pace with an industry that changes frequently.
In order to determine this, it is working with Liberty Village, a campus-like university in Toronto that is considered a millennial heaven, providing the ideal place for nanoPay to test its product. Some of the retailers nanoPay have chosen to work with includes a pub, a florist, and a cake shop.
While MintChip users may have added around $200,000 to their accounts since it launched in June with nearly 10,000 transactions processed, Liberty Village merchants have said that payment with MintChip is still a new concept.
Yet, according to payment processor Moneris Solutions Corp, it believes that purchases made by card will only make up around 10 percent in Canada by 2030 compared to 35 percent in 2014.
However, while it seems like the possibility of a cashless future is heading in the right direction, there still needs to be more done to encourage consumers that paying by phone is far better than using a card.
Featured image from Shutterstock.