A cashless society seems to stand a better chance of growth according to study
A new report from Citi and Imperial College London suggests that economies that decide to go cashless have a promise for better benefits. However, all is not rosy as those that are ready to go completely cashless seem to be scuppered by cultural norms.
Digital money is certainly a big advantage for the payments industry compared to cash. It enables faster payments, encourages users to spend more, and costs less to deal with in the realms of lost or damaged coins and notes. It also makes money flow far more transparent, even if it goes through the likes of a crypto-currency like Bitcoin. But, despite these things, only some people are really making the most of digital money and payments.
In fact, a large proportion of the Western world isn’t ready for life in the digital payments lane; with far more Eastern nations adopting and using it effectively, compared to only handful in the West in a similar situation.
One interesting aspect of the report is that in those countries who are best prepared to accept and make digital payments and deal with digital money, they all tend to spend far less cash. According to a MasterCard report, in Belgium 93 per cent of all consumer spending is happening through digital channels.
But just because a country’s infrastructure is ready, that doesn’t mean that its population is ready to adopt these new methods. One instance of interest is Germany where its readiness is quite high, but interest from the population is relatively low. The opposite can be said of South Korea that, while not quite as prepared as Germany – but still more than other nations – it’s population want to make the jump sooner rather than later.
Digital money and payments are more appealing in certain countries due to security concerns around physical cash or digital money. For instance, Argentinians are weary of inflation and so want to make use of digital money – such as Bitcoin – instead.
Regardless of someone having an inclination towards using and accepting digital money or payments, or not, it’s undeniable that cash will always have a place in society. A lot of us love using it too much, and many small merchants still haven’t made any headway in converting to card or mPOS systems due to the transaction costs attached to them. But who can say what the future will definitely hold for the payments industry?
Sound off with your thoughts on Citi’s research around digital money and payments.
Do you think there’ll always be contention between consumer attitudes and the reality of digital payments?