• by Chuck Martin , Staff Writer, June 4, 2015

It’s quite easy to get caught up in the technology around mobile commerce.

We’re faced with a daily barrage of research studies and announcements regarding NFC, QR codes, RFID radio tags, beacons and the like.

Many of the mobile technology innovations are targeted at mobile payments, so that consumers can use their mobile device to pay in one way or another.

A reality check of sorts came out of the Deutsche Bank Global Financial Services Conference this week.

At the conference, Ajay Banga, CEO of MasterCard, pointed out that 85% of transactions are either by cash and check  and it’s that 15% remaining where the growth in mobile commerce will originate.

A major point that Banga made was that payments are global. The clear implication is that mobile payment solutions have to be global in nature.

I had a conversation with Banga a while back at an event I spoke at in Latin America. At the time, he was clearly very bullish on mobile.

“I continue to believe that mobile payments, proximity payments – if tomorrow, all these expand into mCommerce, which is browser based commerce on the phone, that’s like E-commerce,” said Banga. “It will have the growth rate that E-commerce deserves to have.”

The idea is that lower priced items are where a lot of cash is changing hands, which is the biggest opportunity for mobile payment activity.

“Proximity-based payments has the biggest stability to hit at cash being used in small ticket items,” said Banga.

“In markets like the U.S. or developed acceptance infrastructure markets, the reason we are seeing so much cash is mostly small ticket,” he said. “So it’s your coffee, it’s your newspaper, it’s the cab, it’s that stuff.

“In New York City, when card machines got installed in the cab four years ago and all my countrymen were demonstrating outside Bloomberg’s house saying that you are going to take away my whatever. Actually they were basically fighting about the fact that tips were going to become accountable because they were going to get paid.”

Despite all of the reports about the explosion in mobile payments (Apple Pay, etc.) Banga points out that “50% of retail transactions in America are still cash; 50% that’s in a country where we think cards are ubiquitous, that’s nonsense, they are ubiquitous, they are one of the two.

“When mobile payments really settle down and grow and when the contactless terminals in this country grow, which they will when the chip terminals come in, because the same terminals are equipped with contactless. So over the next year or two you are going to see a large expansion in those. You are going to see a real challenge to cash from those systems and I’m looking forward to that, because I get paid for it, so that’s how I think about mobility.”

For the moment, cash is still king. But the mobile king is just around the corner.