It looks like cash will soon disappear. With an increasing number of fin tech companies, lowered costs are transforming the customer/bank relationships.

cashless transaction

 

The notion of financial transactions without cash is not a novelty. The idea of a cashless world might seem incongruous to some of us. But one only needs to look at international transactions to see an ongoing trend.

The idea of a cashless transaction is therefore not a revolution in itself.

The true novelty resides in two changes. One is the generalization of cashless behavior at the retail level. The other, the global scale of the cashless trend allowed by technological innovation.  

So what can we expect in the next few years and what are the implications of a cashless world?

cashless transaction- cost of getting cash

 

Welcome to the era of global digital transactions

Customers’ relationship to cash is drastically changing.

More people are starting to draw their smartphone when traveling, or shopping. Wallets are now optional.

Nearly half the population in London currently use cards for small transactions. Four out of five transactions in Sweden are already cashless.

The country could well become the first society to abandon cash. The amount of circulating money in the area dropped to 40% in the last six years. Fintech leaders like Azimo drive the innovative rush towards cashless interactions. Following suit are incumbents (Visa or Mastercard) and tech giants (Apple Pay).

The switch to cashless transactions is a global trend.

Fintech startups in Africa like M-Pisa, Irofit or Shield Finance are catering the needs of their specific market. This is driving the continent’s cashless future.

In Kenya already, the total value of mobile transactions was estimated at $24 million in 2013, more than half the country’s GDP.

Developing markets are now adapting and spreading cashless transactions. Innovative mobile solutions allow economies so far kept out of traditional exchanges allow this.
 
But moving towards cashless interactions also bear financial advantages. Convenience, efficiency, necessity, and technological innovation drive this behavioral change.
 
The Retail Banking Research, the banking industry estimates €84 billion/year for maintenance costs. This could be drastically reduced with the deployment of cashless infrastructure.
 
Traditional businesses and regulators are catching up
 
The switch to cashless transactions can ultimately lower exchange costs. But the initial transition will require investment.
 
First to innovate, and second to deploy the technology and infrastructures associated.
 
For retailers and businesses, a move towards cashless payment will have business implications. It will also hold future operational and human resource implications that require planning.
Regulations need an update to support the trend.
 
Moving to cashless transactions raises questions around security and loss of privacy.
 
Among the issues discussed are customer traceability, data protection, and identity fraud. Challenge governments and cashless stakeholders are also currently debating.
 
True disruption is yet to come.
 
Fintech startups are integrating cashless payments as part of a more traditional payment.
 
But some are starting to explore innovation in payments beyond cashless options of point-of-sale.
 
Bitcoins could ultimately be at the forefront of the cashless revolution. That’s if fintech start-ups manage to develop a large-scale use to the technology.
 
Applications are so far limited but explored. Earlier this year, the UK government’s technology provider Skyscape Cloud Services signed a deal with the start-up Credits to deliver blockchain-as-a-service to the UK public sector.

Early Metrics help entrepreneurs gain visibility and credibility with investors and business partners. They provide transparent feedback to entrepreneurs creating a startup.

The Article “The death of King Cash” was written by Antoine Baschiera, CEO & co-founder at Early Metrics.

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Jean Baclit is a creative freelancer based in Manila, Philippines. She graduated in 2007 with a Bachelors Degree in Mass Communication. She has been a customer service professional for 6 years, handled inbound support, back office, data entry and was also an outbound customer representative. She is currently part of the NextStep Services family as a Content Curator and Social Media Manager learning more about SEO. Most of her time is spent with her 1-year-old son.