Cash will soon be a thing of the past. Won't it?
A society in which cash is obsolete no longer seems that far-fetched.
The death of cheques, an increase in credit and debit card use and digital innovations such as PayPal, Apple Pay and Bitcoin are all potentially paving the way to a cashless world.
Who is going cashless?
A study from Starcom found that British people see their country becoming cashless within the next 15 years. In the UK, cash is no longer the most dominant method of payment , with electronic and digital methods accounting for more than half of all transactions.
Technology and digital developments are accelerating this move away from cash. Co-CEO of Starcom, Pippa Glucklich, notes : “Innovation around mobile wallets, wearable tech and biometric payments is fast transforming the traditional view and relationship between cash and shopping.”
The UK isn’t alone in its move towards cash-free transactions. Nordic countries are also leading the way, with Sweden ranking top in the EU for card payments, followed by Denmark and Finland.
Norway and Iceland are also among the top users of cards worldwide.
According to the Global Payments Cards Market Data and Forecasts to 2020 report from Retail Banking Research, the number of payment cards worldwide increased by 11% in 2014. The volume of card payments increased by 13% in 2014 and is expected to continue to grow.
But it’s not just card payments that are moving the world away from cash. Mobile money is a growing phenomenon , especially in developing countries.
Using mobile money does not require a smartphone, a credit card or even a bank account, and it is being embraced by people across the world.
A Mobile Ecosystem Forum report found 69% of mobile users globally used their mobile for banking activity in 2015. In Indonesia that number is 80%, in Nigeria 85% and in Kenya 93%.
Latin America is also making the most of mobile money technology, with accounts growing by 50% in 2014 alone.
Cash isn’t dead yet
Despite the increase of mobile money and card transactions, cash still accounts for around 85% of all global consumer transactions .
The MasterCard Advisors Cashless Journey report measures the growth of cashless payments in a selection of countries.
It highlights that cash is still very much in use, with some countries still using cash for 40% or more of all consumer transactions.
Obstacles to overcome
The World Economic Forum’s Future of Financial Services 2015 report examines the obstacles that need to be overcome before a cashless world becomes a reality.
For example, infrastructure costs and fees associated with electronic payments are off-putting for some merchants.
Convenience is an issue for many customers who prefer cash, especially for older generations who are less confident when it comes to using modern technology.
Security is also an issue - many people simply don't trust the technology. The Mobile Ecosystem Forum report found that 34% of people don’t want to carry out transactions on their phone.
The Starcom report, meanwhile, found that 57% of British people surveyed think technology is less secure than cash.
Have you read? World Economic Future of Financial Services 2015 report Are we heading towards a cashless economy? Who will be king in a cashless world?
SOURCE: World Economic Forum