There’s been many a time whilst digging around in your pocket for a spare quarter for a car meter, or a snack in the vending machine where you’ve had the thought. “Why do we even use these anymore?” In fact, for years we have been told to brace ourselves for the time when cash would be obsolete. Now more than ever, it appears that that day is upon us. Current happenings indicate that the global payment system is fast heading towards a cashless society. Amid the growing use of credit and other online payment systems such as mobile wallets, it’s hard to argue against the trend.
Paying Goes Mobile
A Juniper Research predicts that about 2.1 billion consumers worldwide will use mobile wallets for payments or money transfers by 2019, according to a Retaildive.comarticle. Apple Pay, PayPal, mobile Visa Checkout, and the newly launched W3, which aims to standardize payments on the internet, are some of the electronic payment systems that are threatening to phase out physical tender.
It is no surprise that a large proportion of consumers are increasingly seeking the convenience and speed of mobile wallets. More so, the young generation not only spend their days glued to their smartphones but also adapt quickly to new technology and payment methods. As a result, they find it much more comfortable to use online payment methods instead of cash.
As proof that digital payment solutions are fast becoming the standard, a Bluesnap data reveals that digital wallet transactions rose by around 114% from the fourth quarter of 2017 to the first quarter of 2018, per Retail Dive. Beyond the scope of convenience, some consumers resort to digital payments because they believe that it allows them to monitor their finances better, a CNET.comfeature suggests.
Good (or Bad) For Business?
Concerns have been raised about what this could mean for individual consumers and businesses. If the trend of digital wallets continues in an upward trajectory, it could adversely affect retailers who refuse to adopt electronic payment solutions. Nonetheless, how well retailers fare in this era of digital payment revolution depends on their willingness to embrace emerging technologies and trends in the retail landscape, particularly as regards mobile wallet.
Merchants who wish to maximize the digital opportunity will have to provide consumers with a digital option. That being said, those who refuse to do so will lose sales. For consumers, especially millennials and the younger generations, going cashless is a welcome development. After all, they are less reliant on physical currency.
Don’t Burn Your Bills Yet
Still it seems, there’s hope for cash. A Business Insiderpiece claims that physical tender remains hard to dethrone. One of the reasons for this proposition is that cash will continue to be useful for low-value transactions. Further, around 27% of U.S consumers still don’t have access to other payment methods. There are also growing concerns about online fraud, as some consumers still see cash as the best way to protect themselves from fraud and identity theft. These and more are some of the reasons why physical currency will continue to be relevant in the foreseeable future.
In the end, it is expected that consumer demand for richer experiences and greater convenience will force retailers to rethink their strategies. Millennials are fast changing the purchasing landscape, and retailers must find ways to adapt if they wish to continue to attract buyers. For cash, it appears that its days of playing central roles in the financial system are numbered, even though it may continue to be relevant in some regard.