Retail’s Dilemma over Cash


With the overwhelmingly widespread cashless payments technology, such as mobile card readers, NFC, direct carrier billing, mobile wallets and more; is Cash quickly heading towards its deathbed for retail payments?

According to Harvard Professor, Susan Crawford, “There is nothing more imaginary than a monetary system. The idea that we solemnly hand around printed slips of paper in exchange for food and water shows just how trusting and fond of patterned behavior we human beings are.â€

In the retail industry, monetary value isn’t the essence of overall value, and instead information is what drives value to its full potential. A cashless system is more favorable compared to cash-only, as it paves the way for consumer retention, demographic monitoring, data tracking and many more opportunities that physcial money alone can never match up with.

But the thing is, the world isn’t quite ready for its elimination just yet:

“Cash will never disappear because there will always be a demand for it – for anonymous transactions, illegal transactions, and transactions in far-flung areas where the non-cash technologies haven’t been implemented.†– Robert Ellis of Peterson, Ellis, Fergus & Peer LLP.

Frankly speaking; I don’t really see the difference here because when the world has completed donning an electronic skin, payment methods will soon follow suit. And, for those still worried about anonymity, there’s always Bitcoin – keen in providing that service despite continued government interventions.

Personally, going cashless is a step ahead for retail payments. It has plenty of traction, and potential to expand economically, politically and socially with these three factors being quintessential in the modern trading system. It’s just a pity that Bitcoin isn’t really aligned well enough with these three factors currently.

However, the debate can be easily solved with the Occam’s razor philosophy. Through the simplest analysis, cashless solves more problems than cash, with only one disadvantage being the compromise of security of personal information. (Assuming that there’s no internet downtime of course)

And if retail wants to tread on the cashless path, it has to respect and protect the identity of the consumer.

For a better determining result between cash and cashless, retail outlets can always initiate a “no cash day†campaign for a few days to a week and compare the generated revenue with “cash only†campaigns. That’s if it’s too much of a dilemma after all (by the way, Italy launched a ‘No Cash Day’ initiative in 2012).

There still is the unavoidable question of “Will the cashless system be an affordable one?†This indicates that Cash is relatively king, for now in today’s society. Personally, I find that coins and notes will still prove to be impossible to rule out and, the truth is, technology hasn’t really helped me save more-  although it has assisted greatly in situations where I don’t have physical cash carried with me.

The dilemma for retailers is that their decision to go cashless, or stick with cash, is highly dependent on the preference of the consumer. With many people opting for cashless payments in making purchases, it’s easy to see how retailers can stand to benefit with a cashless structure not just for now, but for the future at least.

This is a guest post by Hanis Jazil

[Image: SimpleIllustrations – Flickr]

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