The Road to a Cashless Society: The Future of Payments
Posted 5 February 2018, Australia
Research indicates that the future (and in some cases the present) of payments is cashless, but is it really and how did we get here? Before looking at the future, let us take a look at how payments have evolved throughout the years.
“Cashless” Society – The way it is
A survey conducted by the Reserve Bank of Australia (RBA) in 2016 shows that, for the first time, card usage has exceeded cash usage with 52% and 37% share respectively in Australia
The same is also true in the UK with 2.9 billion contactless payments made in 2016, which is a significant growth from 1.1 billion in the previous year.1 With the increase in the use of contactless payments, cash is no longer the number one payment method in the UK.2
Sweden leads the world. In 2015, only 2% of the value of all payments made in Sweden were cash transactions. This figure is expected to drop to 0.5% by 2020.3
Consumers are continuing to shift away from paper-based payment methods towards electronic means of payment (cashless payments).
A Global Shift
Everything must come from somewhere, so what has brought about this global shift?
The increase in the use of mobile devices has a significant impact on the increase of cashless payments. As more consumers become mobile, the more their day to day tasks become mobile as well. This includes paying for their bills and doing shopping online.
It is expected that this year, the total mobile payment volumes will reach US$930bn4 and continue to rise in 2019 contributing to the global growth of cashless payments.
Apart from mobile devices, the ever-changing consumer behaviour, specifically the constant need for convenient, hassle-free transactions, also has a direct impact on the rise of cashless payments.
Behavioural Shift = Opportunities
This consistent global behavioural shift presents opportunities to businesses. As the demand for electronic means of payments increases, it raises the question if businesses should also change their behaviour and shift their means of payment acceptance to electronic methods. What does this shift bring to businesses?
1. Maximise revenue generation
Through the consistent increase in the use of card payments, by getting your business ready, you are open to attracting (a) more consumers to purchase your products and (b) to increase their transaction value. In the long run, installing, accepting electronic payments will assist businesses to maximise revenue generation.
2. Eliminate administration burden; Increase operational efficiency
With managing cash comes costly administration tasks. With cashless payments, you eliminate this burden. Payments are made direct to the bank, removing the risk of theft and improving cash flow.
3. Be more secure
Manual cash handling is exposed to a considerable risk of theft, accidental loss or missed revenue. With everything recorded online in cashless payments, security risks are minimised and efficiently managed,
resulting to smoother business operations. Global compliance standards such as EMV certification ensure that both the merchant and the consumer are protected when making their electronic payments.
Today, Not Tomorrow
The future of payments is here now. It might not be the case of an absolute cashless society; however, the facts have spoken. Consumers are using electronic methods more and more. Cashless payments remove the need to constantly visit ATMs to withdraw cash. It eliminates the burden of keeping notes and coins in the wallet. It makes tracking of purchases easier. It provides a more secure method of making payments. Of course, merchants are responding to this behaviour by accepting electronic payments. It does not only increase their revenue, but it is a more convenient and secure way of accepting and managing payments for their business.
Cashless payments are proving to be a more convenient option for both consumers and merchants around the globe.
With this market situation comes significant business opportunities. Is your business ready to take advantage of them?
It is no longer about being ready for the future. It is about getting your business ready for today.
Find out how you can get your business ready. Contact us today.