Cash and digital payments can coexist in the future
While credit and debit card usage is strong, there is no reason to think that cash will become obsolete in our society any time soon. As you can imagine, some consumers are still pushing back on the cashless trend. Whether in paper, metal, or any other form, cash has ruled the world for centuries.
Cash has always been the most instantaneous and secure payment method. Once a customer hands over their money, the debt is paid, and the funds are tangible. Credit and debit cards, which are also instantaneous transactions, can take longer to settle for the merchant.
Mobile applications have also been created which allow peer to peer transfer of funds, but the process to extract the money from one bank account to another can still take some time. However, these methods are more convenient than going to an ATM and incurring the associated fees.
When it comes to payment methods, having the options of cash, cards, and mobile wallets simply gives consumers more choices—which they appreciate. And despite the technological developments in payments, the use of cash still seems to be on the rise. According to Retail Banking Research data from a December 2017 study, 107 billion cash withdrawals were made at ATMs worldwide in 2016, which is six percent more than the previous year.
Greater payment security tools have emerged along with the evolution of credit card terminals, such as EMV and Near Field Communications (NFC) technology, which facilitates contactless payments. NFC technology supports mobile wallet transactions, in which the consumer taps their smartphone on a terminal to make a purchase. The idea of this technology is fascinating, but can also be anxiety inducing because it is unfamiliar. It is one of the factors causing consumer hesitation in the push for a cashless society.
Additionally, electronic payments can be tracked, which some people find unsettling. On the other side of the coin, some argue that limiting the use of cash will dry out the black market and drug trade, because nefarious transactions could be traced.
Some businesses have tried to move toward the idea of a cashless company, but consumers have pushed back, insisting that they want the option to pay with cash. Merchants have argued that removing cash from their business model creates a safer and more efficient environment for their customers. Security risks are inherent when dealing with large quantities of cash. Without cash on the premises, those concerns are mitigated, leading to a more secure environment for the company, employees, and customers.
Replacing cash counting with the simple tap of a credit card or smartphone also increases the speed of a transaction. In addition, a shift transition can be as quick as entering an employee ID, eliminating the time that it takes a cashier to cash out their till. All of this leads to a faster checkout and a more pleasant experience for the shopper.
Regardless of the technological advances in payments, some customers prefer the convenience of cash. The biggest pushback seems to be that they simply want the choice between cash and cards. As far as we can tell, we aren’t moving to a cashless society any time soon, and cardholders will continue to slowly embrace the new payment types that make their lives easier.