As the world is gradually becoming a global village. It has witnessed and continues to witness a lot of far-reaching changes and transformations. These keep evolving beyond expectations with the aim of making life easier for those who are committed to making sure that their everyday lives are filled with unimaginable experiences. People no longer want to go through a lot of stress while performing tasks when there are suitable, less stressful, or stress-free alternatives.
One such transformation is the advent of electronic means of payment. The ease, convenience, reliability, and simplicity that come with this mode of payment will gain massive acknowledgment and endorsement from those who see the opportunities it places on their tables.
Technology is gradually making the use of cash as a means of paying bills a thing of the past. One no longer needs to queue in banks to access funds or worry about scarcity of cash because settling bills is now made easy with credit or debit cards, mobile money apps, and different companies are springing up to fit into the current tides. The system of banking is made easy with digitization.
Digital banking or payment platforms are now replacing brick-and-mortar banks due to their accessibility, convenience, reliability, low cost of transactions, and many more benefits, all in order to make transactions easier.
Before now, people went through a lot to make financial transactions with their customers, and also to make deposits and withdrawals in banks, which required a lot of patience and endurance on the part of bank customers who would troop in their numbers to meet their respective demands. But now, the wave of things is gradually changing, as making transactions is now done with ease, with a few taps on smartphones and other electronic gadgets.
A Cashless Society would work because its system is gradually winning the hearts of many, as they no longer have to worry about their safety when making deposits with bucks stashed in their bags. Physical currencies are on a daily basis becoming archaic and obsolete as people are beginning to see the need to taste the new advancements in technology in relation to financial transactions.
The Effect Of Absence Of Hard Currencies
Needless to say, the excitement that accompanies this immense transformation in technology in relation to finance is something that many enterprises and customers cannot wait to embrace fully. It will definitely have a great impact on their business transactions .
There’s a very high probability that many businesses will aid the campaign toward a cashless society due to the upsurge in bank charges and the faults and flaws that come with the physical banking experience being motivating factors. Although there’s no society that is entirely cashless, the approval and acceptance it has received so far make the trend of cashless systems seem unstoppable.
Nevertheless, supposing that various businesses force a change to a cashless economy before consumers are ready for it, it could cause a devastating experience. A sudden push toward a cashless society could lead to a large number of people feeling financially excluded and having to bear the risk of being exploited as they find it difficult to adapt to the trend. The old and illiterate members of society are often subjected to the risk of being exploited, as they lack self-assurance when using digital banking services and online payment approaches.
Different financial institutions need to work together to make sure that a change to a cashless society is without hitches and is as stepwise as it should be, and to make sure that every part of society is carried along in order to ensure they are not financially helpless or left in the dark.
There are a considerable number of issues that come with a cashless economy that need to be evaluated in order to ensure a proper state of readiness. These factors can hinder many minds from considering it as a great substitute for the conventional banking system.
One thing about the digital economy is that transactions can easily be tracked or traced, and this poses questions about the safety of data. Over the years, there have been a considerable number of records of data breaches that have affected high-profile fintech such as Visa and so on.
This means that the sector still has a lot of homework to do before it can provide efficient coverage. With this kind of threat to security and the absence of a cash system to back it up, a cashless society could be disastrous.
Other crimes like deliberate assumption of someone’s identity, transactions of fraud, and illegal access to accounts are liable to skyrocket if, eventually, digital banking or payment systems take over. Glitches, errors, massive declines, or malfunctions are likely to occur due to the fact that many banks are relying on old networking systems.
This could actually lead to customers’ inability to access their money when the need arises. Before changing to cashless, financial institutions are advised to upgrade their systems of operation through adequate investment.
Not everybody owns a bank account or has digital confidence. Cash may not be healthy, costly, or even aid and encourage crimes like bribery, counterfeiting, etc., but it is easily accessible to everyone, which is the most important.
Similarly, payments made electronically leave a large trace of the transactions made, which eventually becomes a myriad of information exempt from privacy.
The government and banks would still hold significant influence on the economy through monetary policy if the inability to withdraw cash from payment platforms persists.
A Cashless Society Would Work
Financial crime could reduce drastically
The change or conversion to digital payment seems inevitable with the subsequent promotion of cards as a medium of payment. There are numerous positive aspects that would make a cashless society work, even though it seems like there are lots of risks involved. Crimes like corruption, tax evasion, money laundering, counterfeiting, and so on are anonymous and not able to be tracked down due to the physical access to hard currencies, which has made it easy for criminals to use them without suspicion. These organized crimes can only persist with the availability of raw cash and would be very difficult to trace with traceable digital transaction platforms.
To evade tax would be very difficult if, eventually, the mode of visible settlement of bills was scrapped.
Ease of buying and selling
Purchases of items are made easy and stress-free by swiping a credit card or a few taps on a smartphone, which has drastically reduced the frequency of visiting banks to withdraw cash. Due to the ease and speed with which we can now make bank transfers electronically, which affords one to buy whatever and whenever one pleases, people are now avoiding physical methods of payment.
The beauty of electronic means of payment is that they are fast, easy, reliable, and convenient, which is evidently most important to society. Different businesses are focused on how to reduce costs and increase spending.
Although cash alone gives the wherewithal of payment and being paid, people who hold cash lack the ability to build up their financial histories and are also excluded from interest payments, which are crucial to getting access to larger financial services.
Economy will grow at a fast pace
Amid the need for society to embrace a cashless economy with convincing and evolving consumer behavior, massive progress will be steady around the world with the new technologies in place, which aim to serve people better with ease. With different regions like Latin America, the Middle East, Africa, and East Europe slowly joining the rest of the world to embrace this wonder, there are high chances that digital payment will promote the need for people to be tech savvy.
Industries will scale up their revenue
Many industries have greatly witnessed great transformation as a result of the advancements in technology, which have not left the finance sector behind—with mobile mediums of payment. These businesses are relieved of the long and arduous process of making transactions with their prospective customers from far and near.
Although there would be data breaches in the economy, a cashless society would work with electronic-based authorization approaches in place. Digital banking can prove to be a safer way than the physical format(cash).
Automated measurements of biological data like voice, facial recognition, and many more can ensure that a digital-based payment system is safer than a physical approach could ever be.
Unlike cash, which allows people to make transactions unnoticed, cashless means of payment would help law enforcement agencies curb financial criminalities as electronic transactions leave details that can help track criminal suspects and their antics.
Easy Banking
A cashless society (economy) would work because it is stable and does not need brick-and-mortar structures to function.
Bottom Line
It is very important for all the institutions involved—even though there are lots of risks entangled in the change to a cashless economy—to ensure that they leave no stone unturned in the matter, so as to make sure that no section of society is vulnerable to exploitation in the hands of the unscrupulous, who could use the avenue to their own advantage. There’s a need for monetary experts who can help regulate and take necessary measures to ensure that the adverse effects of a cashless economy do not outweigh the advantages.
