Borrowing lines from the most popular song and movie quotes, money is: king, queen, sexy, dirty, all ruling, filthy, nothing, easy and cheap, all at once. In reality, all are true, but in a society grappling with global pandemic, a few of those descriptors deserve circling for immediate consideration.
Cash is a germophobe’s worst nightmare, spreading everything from virus to bacteria with every person to person transaction, yet in some parts of the world, it already hardly exists. Isn’t it time the rest of the world plays catch up?
The technology is already there. Payment can even be taken in the middle of a remote field, using the connection from any mobile phone. In terms of travel, eliminating just one person to person point of contact could be all the difference in any spread.
The revolution is already near completion in Scandinavia, where Sweden and Norway are already circa 99% cashless. Even if you have cash, it’s not always easy to spend it. Digital payment solutions are everywhere, with significantly lower risk to businesses and less hassle too. For small businesses, cash is just one extra headache they no longer need.
Plus, cash is slow. Businesses can complete more sales per hour with card payments. Contactless payment takes the already faster method of paying by credit card and cuts it in half, with transaction times under 20 seconds from start to finish.
The average contactless or digital transaction time is 15-17 seconds, for your next pub quiz.
For merchants, recent studies show that accepting cash can also cost a business more than the transaction percentage fees charged by credit card providers, particularly if a company needs to be paid to transport or deposit the funds, and there’s also the greater risk of fraud from employees.
Basically, the argument that cash is “better” for business is dying. In reality, cash is just better for “hiding” business.
Despite endless negatives from the devastation of this unprecedented virus, positives are still everywhere. Society is learning to help stop the spread of the next global issue by embracing social practices which will slow down future transmission.
Contactless credit card payments, where people pay just by holding their phone near the machine, is just one of the many, but it’s a major one. If you recently re-screened the movie Contagion, you’ll note all the scenes where things change hands.
Going forward, the fewer scenarios where you or your things touch the things of someone else and their things the better. For modeling of future spread, it could be all the difference.
Ultimately, any counter arguments to this societal progress come down to access and technology, both of which are being addressed with each day. Wired has a fantastic piece on the issue. Many argue that a cashless society puts certain groups, such as the elderly or lower income individuals, at risk, since they have lesser access or ease of use with digital banking products.
If humankind will ever move to a fully digital world of money, the most at risk groups cannot be cut off. Digital banking products must be available to everyone. The emergence of new Fintech products, including digital bank accounts without credit checks, is part of this new frontier.
The other old argument, that payment processors were hard for merchants to come by is already a non starter. Anyone can accept payment anywhere their mobile phone has service, with just a little dongle. You can stand in the middle of a field and accept contactless payment, so why shouldn’t any business in a city center?
Digital banking is safer than paper statements and physical credit or debit cards in almost every way, even with the threat of data breaches and online hacking.
Whereas in the old world, people wouldn’t know of fraud on their accounts until they received their next monthly statement, today’s world allows anyone to see transactions in real time, and make one singular tap to stop a fraudulent charge before their accounts, or those of the bank get stung.
In post war societies, such as those in Eastern Europe where cash remains king, fear is the defining factor keeping people from moving to digital banking. These people watched entire governments fold, bank balances turned to zero and saw fortunes stolen overnight, so many from this era don’t trust anything other than the “in God we trust” notes hidden under the mattress.
But as long as that exists, society will face greater risks with future spreads, businesses will make less money and we’ll all be more at risk. Money is dirty, and it’s time to embrace a cashless society.