The Rapid Movement Toward A Cashless Society


 

Would you be ready if an emergency struck and you suddenly were unable to get online to access your financial funds? If you would be, you're ahead of many others. According to the Walker Sand's 2015 Future of Retail Study, which was based on the analysis of more than 1,400 U.S. consumers, the cash trend is on the decline with North American consumers. The study found that at least 59 percent of consumers had $20 or less on their person at the time, nearly one in five consumers admitted to having no cash at all in their wallet. However, even though many people are increasingly preferring the convenience of paying with various digital methods, the majority still affirm that (fiat) cash holds the most security. At least 56 percent of consumers believe that cash is the most superior form of payment currently when it comes to financial security, followed by credit cards which was supported by 22 percent, and debit cards which was only supported by 16 percent of consumers studied. When asked who trusted any mobile app or smartphone app to protect their wealth, only 1 percent responded that they believed this method would offer the most security for their financial well-being.

 

 

The areas where cash is still shown to be popularly used is with street vendors, cabs and transportation (except of course for Uber and other ride-sharing methods which are digital exchange/no cash only), and bars. Of course, as long as there always remains a black market, there will be a need for cash or some other form of mostly transparent currency like Bitcoin. When asked when the last time was that they paid for something with cash, 11 percent responded that they had used cash that same day, 31 percent responded yesterday, 30 percent responded more than 3 days ago, 25 percent responded more than a week ago, and 4 percent responded that they don't ever use cash as a method of payment in the market. Although this survey shows that many might still be trusting their financial well-being to cash, there is a growing trend of making online purchases with consumers. Also, although the study found that digital wallets weren't as trusted by consumers to protect their money, with only 1 percent support, it was surprisingly shown that more people supported cryptocurrency (like BTC). This method of protection was supported by roughly 3 percent of the consumers. As more people continue to pay online, the annual transaction value of online payments--including mobile payments--will reach an estimated $4.7 trillion by 2019, according to Juniper Research.

 

 

Although there are increasingly innovative and competitive ways for consumers to pay for services and items in the market, there are still many who remain skeptical of committing all of their daily actions to an online record that for the most part is recorded and can be tracked. Also, for the time being many consumers still hold privacy concerns and security concerns for digital methods of currency, like Apple Pay. Along with other concerns, like it not being accepted in enough locations, and not being a convenient form of payment. However, the fact that forms of payment like Apple Pay aren't accepted at enough locations is quickly changing, as Apple Pay alone is now accepted at over 700,000 locations including a growing number of vending machines. People are also increasingly preferring the option of paying their bills online. A report that was recently commissioned by the Australian Government in preparation for the G20 meeting in Brisbane back in November 2014, affirmed that digitizing payments was clearly a top G20 goal. "Rapid development and extension of digital platforms and digital payments can provide the speed, security, transparency and cost efficiency needed to increase financial inclusion at the scale required to achieve G20 goals," the report said.

 

 

The Guardian also recently crafted the assertion that a trend toward digital payments would “help billions of people without access to banks” who are living in impoverished nations. Apparently, the expansion of digital payments will “ease income inequality” in those areas, and “spur economic growth.” Although it isn't really clear exactly how just yet. What was made clear however, was that again this effort will advance the G20's goal to introduce billions of people to digital payments. According to a World Bank report, in conjunction with Better Than Cash Alliance (which “provides government, private sector and development community the resources needed to transition to electronic payments") and the Bill and Melinda Gates Foundation, digital payments could bring financial services to billions of people who otherwise wouldn't have such an opportunity. In order to see their goals come to fruition, the G20 launched the Global Partnership for Financial Inclusion (GPFI) which operates with the main goal of bringing digital payments to impoverished nations. Interestingly, the World Bank's report states that one of the benefits for transitioning to a cashless society, is to "promote women's economic empowerment by facilitating greater account ownership and asset accumulation and increasing women's economic participation." As more and more people continue to consider digital payments, more unique apps and options continue to come to market for consumers to support this transition. 

 

 

Just yesterday, Chinese e-commerce giant Alibaba Group unveiled plans for a new method of payment, Smile To Pay, that allows consumers to scan their face, using their mobile payment system with their smartphone. Aside from Apple Pay, there's also Android Pay, Google Wallet with NFC, Samsung Pay, Paydiant Wallet, CurrentC, PayPal Wallet, and inevitably many more. There is also the option of having a chip implanted and paying with that. One high-tech office in Sweden, Epicenter, has taken to implanting RFID (radio-frequency identification) chips into its employees in order for them to open the doors, access the photocopier, and so on. Unfortunately some people are so excited about the prospect of having their payment method implanted in them, that they take to organizing “implant parties.” Back in 2004, it was reported that the Baja Beach Club in Barcelona was promoting that its members also be chipped, the RFID chip would recognize their identity, credit balance, open the door for them, and allow them to pay for food and drinks. Unfortunately, the practice is growing around the world, there are plenty of people who are open-minded enough to be chipped, and several other places from these mentioned above who are currently practicing such payment methods.

 

 

 

 

 

 

 

 

 

 

 

 

 

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