A world without cash is nothing new. There was a time when there were no coins or paper money; however; still, the physical transaction was a phenomenon. The trading of goods took place with the exchange of physical items, just like how it is done with cash. If you are buying something, then you hand over cash to get the required item where previously goods were exchanged with goods rather than with cash. Interestingly, it still goes on in some parts of the world. It can be safe to state that the world does not really revolve around cash.
Going cashless may not be new but technology has revolutionized the concept of a cashless world. It may be quite difficult to achieve, considering the normalcy associated with the cash payment method, but it is certainly not impossible. 92% of world wealth is in digital form, and only 8% of the currency exists in cash form. These statistics tell us that a cashless world is not far away. If the world is already being operated on digital money, then it is just a matter of introducing strategies on a global level that will make the cashless world possible. This article explores how we can go cashless in the new decade.
Pioneers of the Cashless Phenomenon
Something that seemed implausible only a decade ago has been achieved in some parts of the world. Sweden is one such country that has gone embraced the cashless system and will go completely cashless by 2020. Other Scandinavian countries are following suit and will be soon joining Sweden as the cashless economies. Sweden was able to make the switch to the cashless system by introducing mobile payment app named as “Swish”. The app is there just to make the transition easier, and the more important thing is to ensure and embrace the digital payment. Going cashless may be easier in the developed world where everyone has easy access to gadgets that make digital payment possible; however, it will not be a smooth road for developing countries even in 2020. Sweden can be viewed as the pilot project of the cashless world, and in a year or two, the strategies used there can be introduced in other parts of the world too.
Going Cashless in Developing World
As mentioned earlier, 92% of the world wealth is in digital format. This fact itself is an indicator that the transition from cash to cashless is just a matter of devising and implementing strategies specific to the developing countries. It can involve gadgets, such as smartphones, that make it possible or cards that can operate without a bank account. Opening a bank account and maintaining credit is not possible for everyone, therefore a virtual card system along the same lines as a credit and debit card without the need of bank account can make a cashless system possible. There are digital systems in place in the developing world that have made it easier to go cashless, but they require the use of a smartphone. It is along the same lines as the Swedish mobile app Swish, but the limitation with such a system is that it cannot be ubiquitous in the year 2020. The positive aspect is that now that some of the developed worlds have embraced it, it will not be long that everyone will accept, master and use it.
Digital Payments and E-commerce
E-commerce came into existence because of digital payments and cashless phenomenon. The expansion of e-commerce required the integration of cash payment methods, but the phenomenon of online shopping gained popularity on the basis of the cashless system. You do not need cash to go to a shop and get the required goods. Mobile payment apps and credit/debit cards have eliminated the need to carry around cash when going shopping. With the introduction of mobile payment apps and virtual cards, physical credit and debit cards will also become obsolete in the near future. The ease of usage associated with these methods bodes well for mass acceptance. The hassle associated with keeping track of your cash and ensuring you have enough cash before going to purchase something has been eliminated by the cashless system.
Cashless Payment Applications
Going cashless has been made ever easier because of digital applications. Technology has been integrated into every phase of life, from major to minor transactions. Whether you wish to buy a plane or cinema ticket, to pay your bills or to make a retail store payment, it is possible with just a mobile payment app. You can pay for everything virtually without having cash on the person. You can receive a payment in your mobile payment application without having a bank account. You need to register on such applications with your actual credentials just like you use to open a bank account. The best feature of such applications is that you can operate your mobile payment account without any credit limit. Cashless payment applications are being operated throughout the world, and in the near future, the limited use will burgeon into widespread use because of the ease associated with it.
Familiarity with Cashless System
In the modern world, it is not how you can go cashless but more about why you should go cashless. Most of the systems that make the cashless phenomenon a possibility are already in place, but the major issue is with the acceptance and familiarity with those systems. In that respect, the general public should be introduced to that system so that we can get a step closer towards the cashless system. It is not only about the ease at the personal level, but the economy of each and every country can benefit greatly from the cashless system. The crime rate will lessen considerably as unlike cash; digital payment can be easily tracked. Similarly, tax evasion can be prevented if the world starts operating on a cashless system. For all this to work, the public must know and accept this phenomenon. The need of the hour is to devise a way that can make the cashless system work without the mobile payment applications as well.
The younger generation is already more aware of the cashless world than the one that operates on cash. Therefore, it is only a matter of time before the cash-based system becomes obsolete. However, before that happens, the limitations with the cashless system should be tackled and stringent measures put in place to protect the user data and accounts. One of the greatest pitfalls of the digital system is the cybercrime, and the cashless system is not exempt from it either. The more widespread it becomes, the more susceptible it is to hackers. Therefore, this factor should not be ignored when going cashless in 2020 and beyond.