A new report published by The Innovation Group at J. Walter Thompson Intelligence highlights the way in which apps and phones are changing the way young people use money. The Future Of Money report warns that banks had better watch out. The report found that 63% of U.S. millennial consumers hardly ever use cash, and in China, cash

 could well become obsolete in the near future.  China saw a jump in mobile payments from $340bn in 2015 to $9trn in 2017, in an industry dominated by two third-party giants, Alipay and  WeChat Pay.

Unlike the U.S., where fintech startups are developing customized apps for solutions to customized problems, China’s payments giants are co-operating with companies across a wide variety of sectors, including dining and travel, to ensure users can do almost everything on their apps when it comes to transactions. About one-third of total  global fintech startups with a valuation more than $1 billion are from Greater China. The last 12 months have seen several innovations aimed at making payment frictionless, by tapping a phone or smiling at a camera and this is an area where China, in  particular, is leading the way, helped by the government-owned photo ID-base. In September 2017, Ant Financial, a subsidiary of Alibaba, the e-commerce site, struck a partnership with a KFC restaurant in Hangzhou, allowing customers to “Smile to Pay.”

An in-store 3D camera now analyzes each customer’s face and, by zeroing in on 600 facial features, matches the client with their account on Alibaba’s Alipay payment services. Baidu is also experimenting with facial recognition technology, trying it out in a Beijing branch of KFC to see if it can predict customers’ orders by reading their faces.

Asia is also ahead of the curve when it comes to mobile payments, at least in terms of adoption. According to electronic payments company ACI Worldwide, digital transactions will likely account for four out of every five transactions by 2025 in India, (where 56% of customers say they regularly use mobile wallets) and Thailand (51%), than in Spain (25%) or the United Kingdom (14%.)


However, in the Nordic countries, where banks took the initiative several years ago in the face of impending competition from fintech, wallet based apps are popular. And it isn’t just the under 34s who use them. SWISH, the app introduced by Swedish banks in 2012, as a person to person wallet in 2012, is now used by 5m Swedes, over half the population, and for commercial transactions. The use of cash in Stockholm, the capital city, is now almost universally banned: you can even pay street vendors by Swish or card.

Swedes tend to believe that avoiding cash is the best way to avoid employee theft from cash takings and fraud. In Denmark, Mobile Pay, a digital wallet owned by Danske Bank and launched in 2013, is the most popular app, second only to Facebook. In 2016, a study found that card payments in the Nordics were already two and a half times above the European average, making up 75% of payments in Norway.

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