Cashless Society Explained In Black & White.

Cashless Society explained in Black & White.

Technology is advancing and we must take advantage of it, a lot is going on the Fintech world and payments are being made in an electronic form securely and faster. Instead of keeping wallets, we now have mobile digital wallets like Apple Pay, Alipay, Google Pay, Samsung Pay, Revolut and Paypal. Paying individuals or businesses are easier, secure and faster via electronic channels.

Currently in Sweden, Denmark, Norway and many other developed countries – ways of making payments are via plastics (Credit or Debit Cards) and contactless payments using your mobile phone, Smart watches etc. Only about 15% of the transactions are cash.

Drivers in these countries are no longer accepting coins or banknotes and a number of the stores are no longer accepting cash either but cards payments and contactless payments. The Banks are beginning to reduce the numbers of the ATMs as more people are embracing digital payments which are not only faster but more secured. Most ATMs are now owned by private businesses and they charge a fee for all transactions.

The Chinese economy is not left out, they are embracing QR Codes. Everywhere in China, from the Taxis to the shops – You will see QR Codes available for your payments, your cash is not needed and many are comfortable with it as it protects not just the buyer but the seller against robbery and loss of funds, everything is digital.

These days you don’t have to worry for not having your wallet with you or having cash. There are various applications in place to aid you, from banking applications to make fast payments to individuals or pay your bill, third party money transfer applications. You no longer need to visit your bank for most services, they can be done on your phone – including opening a bank account or applying for loans. It is that simple.

Cryptocurrencies like Bitcoins, Litecoins and etc. are making their way and Bitcoin is now an acceptable form of payments in some shops and e-commerce shops. They even have Bitcoin ATMs’ installed that I have seen around.

Developing countries like India, Somalia, Kenya, South Africa, Zimbabwe etc have embraced mobile payments to move money around and make payments for services without the need for cash. Just in 2016, India removed its highest denomination bills and that in turn removed 90% of their banknotes from circulation.

One of the leading banks in China, The People’s Bank of China has equally acknowledged that physical cash may one day become obsolete.

These are the benefits of a Cashless Society.

· It saves time in handling banknotes, storing, securing and depositing them

· It takes away fear when handling cash

· It reduces robbery attacks and in turn lower crime rates

· Better currency exchange when traveling

· It eliminates or reduce money laundering to the minimal

· There is always a paper trail for all payments made and received on any transaction. Therefore scam would be reduced

· Abuse of office and votes buying would be reduced – cash would be hard to move about

· With this policy, the war against terrorism and black market would be active and effective

· It increases the efficiency of both the merchants and the customers, no more messy banknotes and clunky coins

· It speeds up wait times for customers and increase productivity for businesses

· For the government – it saves money by not printing much banknotes or minting coins but relying on digital payments

· It increases tax collections as it becomes nearly impossible to hide incomes or evade taxes

· Financial crimes would become obsolete in a cashless society

I must however agree that there is indeed a disadvantage too as people in the rural areas or people who technology left behind would be stranded without having a bank account. So, it must be a gradual process and the infrastructure must be in place to make it a success and guide the people.

We don’t want to leave people unbanked, having a bank account is a necessity in this era and it’s the right of the people to spend their money as they desire but the government must introduce policies that would benefit and protect them. In a cashless society, many people would be unbanked and they would struggle to buy whatever it is they desire to survive. This group of people are used to using cash for their daily purchases.

I personally prefer a cashless society, I haven’t seen or touched much of banknotes this year and I transact nearly every day using my mobile phone – as I am not only protected against fraud, robbery but confident that my payments are secured and whoever I am paying to is known and traceable.

Cashless Society and Digital Payments are the future. You cannot grow an economy without embracing technology in all sectors, including in Banking.

Tunde Oluomo is a Payments Expert writing from Dublin, Ireland.