Going cashless means relying less on physical cash and instead using digital payment methods to conduct transactions. This includes using credit and debit cards, mobile payment apps, online banking, and other electronic payment systems. In a cashless society, physical cash would no longer be the dominant means of payment, and people would have to rely on digital payment methods for their transactions. The move towards a cashless society is driven by various factors, including the increasing use of mobile devices, the growth of e-commerce, decentralized markets, and the desire for more convenient and efficient payment methods. Below, we’ll look at the concept of a cashless society and why the world is going cashless.
If ever there was a reason for believing that decentralized markets and banking were the future, read the recent banking headlines that reveal we’re in the middle of an institutional banking crisis. Also known as decentralized exchanges (DEXs), they’re a type of cryptocurrency exchange that operates on a blockchain network that is decentralized, allowing users to trade cryptocurrencies in a peer-to-peer manner without the need for intermediaries like traditional centralized exchanges. These decentralized markets facilitate transactions seamlessly, thanks to new technology, such as Nano, fuelling the drive behind decentralized payments. Many of these companies will also have their own coins to trade, with the Nano price relatively low.
Dubbed as DeFi, decentralized finance is on an exciting trajectory in 2023. Nasdaq recently released an article that hailed DeFi as the future, soon to become as common knowledge as the internet. It’s off the back of news that financial and economic services will run on Distributed Ledger Technology.
One of the leading drives behind the cashless society we’re now nearly in is contactless payments. Contactless payments were once an uncertain and seemingly untrustworthy application, with many people still opting to use their cards rather than the technology directly linked to a smartphone. Users will have a wallet, typically an Apple or Google Wallet, that holds card information ready to use at the click of a button. Contactless payments allow users to make payments without physically swiping or inserting their credit or debit card. Instead, users can simply hold their card or mobile device near a contactless-enabled terminal to complete the transaction.
Working alongside that is biometric authentication. Fingerprint and facial recognition technology has rapidly become a preferred option to secure and streamline digital payments. Alongside contactless payments, biometric authentication reduces the need for physical cards or cash, as users can simply use their biometric data to complete transactions. According to studies, over 80% of Americans report using contactless payments to complete transactions when in public.
More simply, online banking and its accessibility, along with numerous lucrative app features, make it one of the reasons why a cashless society has become the norm. Gone are the days of walking into a bank and asking for a statement or relying on an ATM or bill each month. With the click of a button – typically a biometric one – we can access our banking information on the go.
As you can see, accessibility seems to be the theme and the driving force behind the cashless society we’re heading towards – but it’s not just biometrics and Google Wallets bringing us closer to our money electronically. It’s the businesses fuelling the desire to facilitate electronic payments. For example, most chip and PIN machines now have a contactless option. Plus, post-pandemic, you’ll find that sports venues, music festivals, concerts, and, in fact, most major venues will provide contactless options.
There are some countries where cashless isn’t necessarily advised, and they’re mainly European countries with high tax rates for businesses. In Spain, for example, it’s widely understood that many companies don’t want to deal with card transactions, let alone contactless, and prefer to deal in cash for less than legitimate reasons.
The Growth Of E-Commerce
E-commerce, or electronic commerce, refers to the buying and selling of goods and services over the internet. Over the past few years, e-commerce has experienced significant growth and has become a major part of the global economy. E-commerce relies on online transactions, using digital payment methods like credit cards, debit cards, and online payment platforms like PayPal. That means consumers are less likely to use cash to complete transactions, as they can easily pay online without needing paper money.
E-commerce has led to the growth of online marketplaces and digital storefronts, reducing the need for physical stores and cash-based transactions. Consumers can now shop from the comfort of their homes and have products delivered directly to their doorstep without needing physical cash or physical stores. That’s evident when you look at how many stores are closing down – Foot Locker and Bed Bath and Beyond are some of the latest closure announcements.
The world is close to going cashless, although most stores won’t turn you away if you walk in with cash. The concept of going cashless will never negate the need for cash – but it’s an exciting concept that’s fuelling the creation of new technology that’s bringing us closer to our money.