PAYMENTS
and challengers offering attractive , low-cost alternatives , incumbents have had to reassess their services to remain competitive .
The decline of cash is also being accelerated by retailers and other businesses who shun it because of administration processing time , costs and higher insurance premiums .
New technologies have also resulted in digital payments becoming extremely convenient because they can also be made in real time , via blockchain and across borders , eradicating the need for expensive and time-consuming processes that are also open to human-caused errors . And online shopping – now the dominant retail trend in Western countries – is also only possible through digital transactional methods .
Peplow says mobile technology has been the key transformative factor in the rise of digital transactions . “ Accessibility and day-to-day end-user support for banking products are key . The rise of mobile banking and digital banking products has allowed more of the unbanked to become banked , though there ’ s still work to do .”
Malhotra comments : “ Simplified personal financial management is the obvious benefit for the average person . Much of our financial activity is already quasi-digital today . In much of Europe , Asia , and the Americas , people receive money through electronic transmission from employer to bank , net contributions to the government through the digital tax system . The majority of bills are settled electronically . The dependence of physical tokens of currency is diminishing year on year . Most people can manage their finances more conveniently in this way .”
However , he concedes that although digital payment systems eradicate issues such as physical theft and loss of money ,
“CASH CANNOT BE TRACED , WHICH SOME PEOPLE FIND ADVANTAGEOUS AS THEY DON ’ T WANT THE STATE TO KNOW THEIR FULL FINANCIAL HISTORY ”
MIKE PEPLOW CEO , PAYNETICS
they don ’ t prevent other types of financial crime ; rather , fraud can be a bigger threat within a cashless system . “ One caveat to this benefit is that while it ’ s hard to ‘ lose ’ money in a cashless system , people can be more susceptible to theft through fraudulent acts .”
When will we be cashless ? It ’ s impossible to say , because some countries inevitably will be faster than others in reaching this goal .
China issued a statement in 2017 declaring it wanted to make all rural areas cashless by 2020 . This has not quite been achieved – but progress has been significant . Sweden is 95 % cashless , and this has raised concerns from some areas of Swedish society , where there is a belief that financial institutions and governments now have far
74 May 2023