Christopher ZeniosIn the UK only 34 % of transactions are now made in cash according to research from UK Finance, with debit cards overtaking cash as the most popular payment method for the first time since 2017. Sweden leads the way of a cashless society as cash payment accounts for just 2 % of all transactions.
As the use of info structures that maintain money is used less and less the cost to run such establishments will no longer be viable, thus leading to the acceleration of digital payments. This potentially has the risk of escalating too fast resulting in people not using cash before they are ready, leaving some financially excluded and potentially facing the risk of exploitation.
Due to these concerns, the need for FinTech companies and existing banks to work together is ever-present to protect the vulnerable and make the transition into a cashless society smooth and safe.
Cashless Society Benefits
Cash is not traceable and can be anonymous, these factors make physical cash ideal in largely contributing to crimes, bribery, tax evasion, money laundering, counterfeiting, and terrorist financing. In contrast, cashless transaction leaves traces and are harder to conceal and evade taxes.
The cashless society will also make it more convenient and easier to exchange currency internationally while travelling. There will be less time and cost spent on handling physical money, as well as the facilities for storing. Digital cash will speed up transactions making payments and transfers instant.
Steps Towards a Cashless Society
Many new businesses are pioneering the idea of a cashless society. For example, in China, a platform called peer to peer that does not charge fees can provide instant transaction via the chat application WeChat that allows people to charge it with money allowing you to pay everywhere with it by scanning a QR code. It is designed similar to Bitcoin, but without the mining setup and proving to be more efficient.
Other companies are following this example in Europe such as Cashfree that has received a European payment license in Belgium and has 4000 active users.
It is clear that with a higher number of people using cashless payment and new businesses stepping up to cater for this soon a cashless society will be here.
