32 The Future of Payments: Cash, Cryptocurrencies, and Peer-to-Peer Payments

Abstract

Access to some form of money is essential to participate in the economy, but money today takes a wide range of forms from traditional cash to cryptocurrencies. Although cash still represents the payment of choice for the majority of transactions globally, the importance of alternative payment platforms is growing, particularly peerto- peer ‘payments’. The new kid on the block is cryptocurrency, and the jury is still out on whether it will disrupt the sector. Researchers and policymakers are interested in what drives the choices consumers make between the payment platforms available to them, with technology being a key driver on the supply side, and demographic factors and personal preferences on the demand side. Understanding these drivers can assist in encouraging behavioral changes, for example where a payment method is being removed. Policymakers are also interested in issues such as cybersecurity, given the increasing use of electronic payment options, and encouraging competition, via open banking and management of network effects. Considerable ongoing research on payments means researchers and policymakers have access to a range of data. It is unlikely that cash will disappear any time soon, but the development of new payment platforms continues to offer additional options for consumers while providing new avenues of research.