Consumer habits are changing. The number of bank ATMs fell 9 percent last year. The number of cash transactions dropped an identical 9 percent. However, use of credit and debit cards and online banking is rising.
If Carol Realini has her way, consumers will be paying by cell phone. Realini is founder and CEO of a Silicon Valley start-up called Obopay.
"People start to use it and they say, 'Oh this changes the way I do things. This changes the way I settle up bills with my friends. It changes the way my mother sends me money. It's the way I pay my bills back to my family members.' So it changes the way things are," says Realini.
Obopay uses your cell phone as a payment device by transferring money from one cell phone user to another. It draws funds from a debit account you set up with Obopay. Payments can be done simply by texting or by using software installed on the phone. The sender is charged a small fee.
It is ideal for paying merchants who typically operate on a cash basis.
"That would be hairdressers, piano teachers, the person who cuts the lawn, the babysitter, street vendors and so forth, and there are millions of these small businesses,'" says Obopay president Gregory Holmes.
Or Obopay could simply be a fast, easy way to re-pay a co-worker for coffee, or to send money to a son or daughter at school. No cash, no checkbook needed.
"You can leave the house without your wallet, but I don't know anyone who leaves without their cell phone," says Terry Sanders, a stylist at the Expressions Salon in Menlo Park. He has been accepting Obopay for months. Payments are received in mere seconds. A pin code provides security.
Obopay likes to say the service spreads like a virus because once people see how easy and simple it is, they turn around and use it themselves.
"I've started to pay my housekeeper and my gardener on it. It took some convincing of them, but they seem to enjoy it," says Sanders.
The concept is high-tech, but CEO Carol Realini admits the idea originated in 2000 during a visit to a mobile phone store in Africa.
"People were standing in line with bags of money to buy their prepaid minutes. They'd take the prepaid minutes and they'd put them in their cell phones, and then they'd start making phone calls, and it just occurred to me that this system could be changed and altered and it would give everyone with a cell phone access to banking services," says Realini.
The name Obopay is derived from the name of an ancient Greek coin, the obol.
For now, Obopay is available in the U.S. and in India, but it is very clear that the service eventually could go global.