Digital transactions are increasing in popularity, and the UK predicts to be nearly cashless by 2024. All around the world people are choosing digital payment methods more and more. In this post we will discuss how the COVID-19 virus affected digital transactions, the different types of cashless payments on the rise, and the pros and cons of a cashless society.
Cashless transactions have been rapidly increasing since the pandemic began. Cash used in stores has decreased by around 20%, while online purchase through credit card payments or PayPal has increased nearly 60%, sparking a behavioural change that many people did not expect for many years to come.
The virus has reinforced the idea that a society without cash is not only possible but inevitable. It is responsible for people making decisions to abandon traditional methods of payment and adopt newer, more secure methods where they can pay for goods and services more conveniently
5 Different Types of Cashless Payments on the Rise
- Credit and Debit Cards
- Mobile Banking
- QR Codes
Credit and Debit Cards
Credit and debit card payments are one of the most common form of cashless transactions. They’re accepted worldwide, with some exceptions. Credit card companies like Visa and Mastercard allow merchants to accept their credit cards for mobile purchases via a smartphone or tablet, using an application such as Apple Pay or Android Pay.
Mobile banking is a popular form of cashless payment. Most banks now offer mobile apps which allows you to make online payments, transfer money and manage your finances from one device.
USSD is an acronym for “Unstructured Supplementary Service Data”. USSD allows a person to send instructions to their financial institution using GSM technology. One of the primary uses of this form of payment system is electronically transferring money from one account to another, however, it can also be used in other ways such as paying bills.
E-wallets are a form of digital payment system. They allow users to store money in an account that is usually connected to their bank account and then access it by using the mobile phone or other devices through apps like Google Wallet.
QR Codes are a type of bar code that can be scanned by smartphones. This form of payment is mostly used on a business to customer basis. It is popular in food and drink establishments, for example, Starbucks or McDonalds. The QR code can be scanned by the customers’ smartphones. Governments around the world, including those in the UK, are converting benefits payments to QR codes for use with contactless payments.
What is a Cashless Society?
A cashless society is a world where digital payments are the dominant form of payment. The first step on the way to a cashless society is when people start using digital payment methods more than traditional forms of payment.
Today, we are witnessing a shift from traditional methods of payment to digital payments. The pandemic has played an important role in this change by encouraging people to abandon cash and embrace the new world where everything is available on their smartphones.
Concerns about a cashless future have led to a discussion of the potential pros and cons. However, it is clear that this trend will only continue to rise as the years go on.
Advantages of a Cashless Society
The pros of going cashless are varied and can be broken down into three major categories: convenience, safety and efficiency. It is convenient for people to have access to their money on the go through digital devices. Digital transactions are safe as they don’t require physical contact like exchanging goods in person does.
Efficiency is a major benefit. In the UK, for example, people are predicted to be nearly completely cashless by 2024. This means that there will be less work required in distributing physical money and conducting transactions.
Disadvantages of Cashless Society
The disadvantages of a cashless future are much more tangible. There are fears that this type of system will affect the economy by transferring power from banks to tech companies and leaving governments without control over their own currency. Another major concern is privacy, as large corporations like Facebook have faced penalties for tracking customer behaviour.
Cashless Payments Conclusion
In conclusion, contactless payments are becoming more and more popular. The trend is driven by the COVID-19 pandemic, which has encouraged people to abandon cash in favour of digital transactions.
Although there are disadvantages with this form of payment system, it seems like this type of society will only continue to become a greater part of our lives as time goes on.
As technology advances, we may see even more benefits from going completely cashless, including convenience, safety and efficiency for businesses and customers alike.
Which do you think has been your favourite benefit? Let us know in the comments below!