17 examples of how the global economy is shifting towards a cashless world

Throughout the years, as a society our relationship with money had evolved many times over. There was a time that cash was gold and money was considered a passport to freedom. But with each new generation we’ve evolved into a more cashless society. As credit cards began replacing cash, a new realm of cashless possibilities opened for businesses and individual consumers. And with each passing day cashless systems continue to evolve with the development of new payment applications.

Of course, cashless payment solutions are not exclusively limited to credit cards. The overall picture of a cashless system includes many electronic methods. In America alone, there are numerous popular apps, from PayPal, to Venmo, to the Starbucks app, and Apple Pay (which, according to Statista, boasts 383 million users worldwide). There are also self-service solutions that dramatically open new possibilities for this industry.

One of the leaders in this cashless payment industry is Nayax. Known predominantly for its cashless payment solutions amongst the self-service industry, has redefined the way these companies conduct business. Once limited by cash-only payments, the self-service industry can allow consumers to enjoy their services in a cashless way.

 

Pay with your phone on the bus or train with Nayax's Onyx Go and Onyx Go Plus devices, offering open cashless payment opportunities on mass transit. This enables anyone to purchase a ticket without needing to buy a prepaid card or buy a before boarding.

Looking at the industry landscape, the self-service industry is just one of many industries who have been able to evolve their business models and adapt to the cashless future. Along with the numerous amount of countries developing plans to take their economies cashless, our world is quickly heading towards a cashless future.

Here are the top 17 ways the global economy is steering us toward a cashless world:

1- Cashless Solutions Across the World

2- Cashless Netherlands

3- Cashless Sweden

4- Cashless India

5- Cashless South Africa

6- Cashless Schools

7- Cashless Tolls

8- What Do the Critics Say?

9- The Value of Touch

10- Will a Cashless World Exclude the Disenfranchised?

11- What About Millennials and Generation-Z Consumers?

12- Closing the Age Gap

13- The Cost of Cash

14- A Better Security Method

15- How COVID-19 Has Impacted Cashless Payments

16- Cashless Options, the Benefits of Online Shopping

17- Conclusion

1. Cashless Solutions Across the World

 

Digital-Payment-Wallet

All over the world, governments are taking action, big and small, to move their societies towards a more cashless future. Check out this list of countries to see how our world has already begun to incorporate cashless payment solutions in everyday life.

2. Cashless Netherlands

cashless society netherlands

 

A recent Merchant Machine Study states that the Netherlands places number one in Europe as the most cash free country, with over fifty percent of payment transactions as contactless. The Netherlands also coincidentally has one of the lowest numbers of ATM machines in Europe, which may be a by product of their cashless lifestyle, or perhaps it has helped to create it.

3. Cashless Sweden

cashless sweden

One of the main headlines posted on the official Swedish website, reads, “Cash is no longer King in Sweden.” Apparently, Sweden aims to become the first cashless society, and this eventuality is a possibility due to the fact that Swedes generally have great confidence in their government systems, ranging from healthcare to banks, and other establishments. According to a survey conducted by Sweden’s central bank in 2018, credit card payments had jumped by 25% in just two years.

Minimizing Paper Money Production

Riksbanken, Sweden’s central bank, predicted that between 2012 and 2020, circulation of paper money would wane by up to 50%, yet another indicator that Sweden is moving in a cashless direction.

Microchip Payment Solutions

The official website of Sweden also states that out of every five purchases made in Sweden, four are bought using cashless electronic systems. Not only this, but a recent awe-inspiring development is that not long ago Swedes began to implant a microchip that enabled them to make purchases with just a thrust of the wrist. As of 2018, more than 4,000 Swedes had enthusiastically agreed to have a chip implanted. Who’s to say how long it will be before this new technology becomes internationally accepted?

These cutting-edge developments make it clear, that although Sweden is not yet considered a cashless country, it is closely approaching this title, and will perhaps become one of the first cashless countries in existence.

4. Cashless India

cashless-india

When one thinks of cashless countries, perhaps India is not the first country that comes to mind, however, since 2015, the Indian government has developed a program entitled The Digital India program, who’s sole aim is to turn India into a technologically liberated society, where digital advantages are universally accessible. This program has worked to make internet access more widely available throughout the country, as well as developing programs that make medical records and other important documents easily available online, but it also has a vision for an economy that is cashless.

The Digital India Program

According to the Indian government website, the Digital India Program’s motto is, “Faceless, paperless, cashless,” a sure sign that India wishes to lead the way in the modern cashless economy. From credit cards, to AEPS, to a mobile wallet system, a tool that easily enables cash transactions via phones and other electronic devices, India is working hard to stand at the forefront of the cashless revolution, and to empower its people in ever-changing times.

5. Cashless South Africa

In South Africa, people are searching for cashless solutions, as is also true with many other African countries. Thus far, mobile phone transactions have been a helpful tool for many South Africans, as they are safe, fast, and effective. Affordable mobile phones are easily accessible in South Africa, and a system of mobile transactions is this country’s primary access into a cashless economy.

Cashless Transactions Via Mobile Phones

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Cashless payments make transferring money from cities to relatives in rural areas, via mobile payments, a promising method of community support. The cost of cash is high in South Africa, with the bulk of those costs being unduly thrust upon those who are in a low-income bracket. Therefore South Africa is the perfect environment for the development of additional cashless solutions, a new market that will help to benefit people from all walks of life.

Though these countries are making a strong effort to propel our world towards more streamlined use of cashless solutions, they aren’t the only ones. Organizations and industry providers are making efforts too to cut out the use of bills and moving toward a more virtual cashless experience.

6. Cashless Schools

More and more grade schools are choosing to go cashless, and parents are increasingly advocating for this option.

cashless schools

Many schools have eliminated or have begun to cut out the circulation of bills on their premises. This change may have stemmed from parents wanting a sense of security for their children, which would result in a safer atmosphere with the elimination of children walking around carrying bills. It may also have come from a desire to create a more optimized school canteen. Cutting out the stress of having to maintain a cash register, as well as someone to manage it would have been enough of a motivation for such a change. Regardless of what the catalyst was for this change in the school systems, cashless payment solutions will help to improve school environments for administrators, staff, students, and parents, alike.

Included in the changes the school systems have taken to limit the use of bills on campus is the implementation of online payment systems. With the use of this system, parents can stay abreast of their child’s needs, from books to bills, to following their progress without interfering.

Schools also happen to be an ideal location for incorporating of electronic self-service vending machines. Wouldn’t it be great if a child could easily access a snack, books, or a meal, without having to be concerned with carrying cash? A cashless environment could be a great asset for children, helping to minimize the possibility that a forgetful child could lose the bills that they need to pay for lunch, or that they might be robbed for their lunch money.

7. Cashless Tolls

Toll systems are another organization amongst the list of early adapters to make the change from accepting bills and change to shifting toward a cashless system. Cashless tolls were created as a way to reduce traffic congestion, and to minimize avoidable toll tickets, while also making roads, bridges, and tunnels safer for motorists. In America, cashless tolling is becoming increasingly popular, and one of the primary digital tolling devices, known as the E-ZPass, is used in at least 16 states.

toll roads-cashless

More than 35 bridges, tunnels, and toll roads in the United States are using cashless systems, including the New York-based MTA. For those who wish to rent a car in America, the E-ZPass is replaced by the PlatePass electronic toll transponder. The prevalence of these small windshield-mounted devices that allow for electronic cashless tolls now means that those who choose not to go cashless will wind up in traffic, waiting on line, increasing emissions, and jamming highways. The cashless toll is yet another example of expedited living that casts the old ways of living in a dimmer light.

8. What Do the Critics Say?

With all of these developments it beg an obvious question. If our world is headed towards a cashless future, then what will happen to human connections and interaction and how will they be effected?

9. The Value of Touch

People are searching for new ways to feel connected, and there is a question as to whether the cashless economy will provide new and interesting ways of communicating, or perhaps even free up more time for people to spend together.

Gone are the days where paying your bills required you to speak to a company representative. Nearly our entire world has become automated, be it bank deposits or ordering takeout delivery. But with a world moving away from in-person connection, perhaps this will leave more time for each other. Will contactless, cashless companies look to developing new inventions to elicit that same sense of connection? Perhaps new means of expressing VIP status will also be established, such as in the early days of credit cards, and there will be exciting new tools for rewarding distinguished clientele, and for merchants to make inter-personal contact with their customers.

 

Monyx Wallet, Nayax's digital loyalty app, gives consumers cashback when they shake the app

10. Will a Cashless World Exclude the Disenfranchised?

cashless-solutions-inclusion

In America, there is a large class of working poor, as well as a great many undocumented workers who may very well help to keep society running, but who do not always have access to credit cards or bank accounts. There are also many homeless people who rely on spare change and random dollar bills handed out by those who pass by to make small and very necessary purchases. How can a cashless world develop while including these people who are a part of society, but who can at times be excluded from certain forms of government protection?

Prepaid Cards to Help the Poor

It is essential that governments take all demographics into consideration, providing solutions where needed, as is the way in successful societies such as Sweden, where homeless people are being given prepaid cards so that they can have equal access to basic amenities. If our world is to become more cashless, then those who are in a low-income bracket will need access to bank accounts, and the assurance that bank branches will not be removed from poorer areas. Such examples of thoughtful economic inclusion demonstrate how a society that helps its people is more likely to be successful on the whole.

Electronic Inclusiveness

In order to truly establish a cashless society, there must be a cultural shift in which universal access to the Internet becomes a basic human right. Many countries would like to establish more cashless systems, enabling them to join the global economy on another level, but if their citizens do not have equal access to mobile systems, then there will never be a chance for total transformation, what some refer to as a “movement” into a cashless economy. For multiple countries, widespread Internet access will be necessary in order for these major cultural shifts to take place.

If this large-scale change is to happen effectively, then all must be welcome, and everybody included. Of course there are some challenges to be expected, but the ease of entering a cashless world will likely make these transitions worthwhile.

11. What about Millennials and Generation-Z Consumers?

millennials-cashless-payments

 

It is said that many millennials refuse to shop in cash-only venues, and yet, conversely speaking, might the development of exclusively cashless systems exclude the senior set? Addressing any generational gaps will be a key factor in establishing successful cashless payment solutions that can be reached by everyone.

If data suggests that by the year 2026, cash will become obsolete within the UK, then most likely this trend will be prevalent throughout the world. And if so, how will people fare who have spent the bulk of their lives using bills as a preferred method of payment? This same report, conducted by the Access to Cash Review, estimates that at the very least, within the next fifteen years, it is possible that one out of every ten purchases in the UK will be made in cash.

12. Closing the Age Gap

elderly man-cashless-solutions

 

In the U.S., many small businesses might be leaning toward going cashless, yet claim to worry about alienating their customers who may have spent the bulk of their lives in a pre-digital world. However, there is evidence demonstrating that many senior citizens have jumped on the cashless bandwagon, and that they use technology just as freely as their millennial counterparts. Again, it’s a question of inclusivity and accessibility, as to whether near-future generations of seniors will be fully integrated into a cashless world.

13. The Cost of Cash

There is an expression that states that it costs more to make a penny than a penny is actually worth. Well, producing just one penny costs 1.5 cents, deeming the entire process far from cost effective. It may sound strange to hear that there is a cost associated with the upkeep of cash stockpiles, but depending on the country and the system, such overhead does exist.

Reducing Maintenance and Production Costs

 

cash-cost-cashless-solutions

One example of cash costs is that ATM machines require upkeep to remain functioning, and to maintain a supply of available cash, and, as with any computer, maintenance comes at a cost. Interestingly, these costs vary from country to country, as detailed in the Harvard Business Review. If you look at the Majority World, at countries in Latin America and sub-Saharan Africa, these expenses become unduly high due to systemic difficulties and concerns about keeping funds secure, yet another subtle reminder that there is no such thing as a fair economy. Then there are also physically vast countries, containing far less populated regions, (such as Russia, Australia, and Canada), where operational difficulties are an impediment to having free-flowing cash available at an affordable rate.

In more populated countries, the cost of cash is also high, due to the average processing time. These issues arise in countries such as Nigeria, Indonesia, India, China, Bangladesh, the Unites States, and Japan, as well as certain Western European countries, such as Germany and France. Every year, the United States acquires a $200 Billion fee just in order to uphold a steady cash flow. China, with its advanced mobile payment systems, also places a high cost for cash accessibility onto its people.

Yet another advantage of using mobile payment methods is that they help to establish lower cash costs on a national level. Countries that already have established electronic payment structures also tend to have a lower absolute cash cost. These advantages are prevalent in Scandinavian countries, such as Denmark, Sweden, and Finland, where such cashless systems are already in place, while those countries with swiftly developing payment structures, such as Kenya and South Korea, also have a lower overall cash cost.

14. A Better Security Method

Of course there are also some fears and pitfalls associated with living in a world increasingly dominated by credit cards, but more and more it seems that the positives outweigh the negatives. One large deterrent for consumers is credit card debt. There are those who view a credit card as a passport to freedom with no concrete economic consequences (temporarily forgetting that behind that plastic card there is real money that must be managed), or who unknowingly choose a card with a high interest rate, causing unmanageable debt to accrue. With that said, though credit card debt can become a trap for some, generally speaking, credit cards are a great asset to our modern economy. Credit cards can also serve as a lifeline for young and inexperienced consumers, enabling them to have access to a system of lending that would otherwise exclude them, such as bank loans that are inaccessible to those who have yet to build a line of credit.

EMV- cashless-payments

 

How Cashless Payments Have Improved

Another major deterrent when it comes to using cashless payment methods, is the possibility for fraud and identity theft. This issue falls both on the side of consumers, as well as with businesses, and yet constant systemic improvements are being made to help prevent these pitfalls from happening. An advantage that credit cards have over bills is that they can also protect your money.  When it comes to credit cards, one is not penalized, whereas with instances of cash theft, the victim is left completely powerless. Once cash is gone, it is irretrievable, whereas with credit cards, there are still many options for reimbursement.

Ever since EMV chips containing encrypted information replaced magnetic strips, credit card transactions have become infinitely more secure. In fact, EMV chips are now so preferred, that in the event that there could be fraud, merchants can actually be held accountable by banks if a business makes a transaction using a strip on a non-EMV device.

 

15. How COVID-19 Has Impacted Cashless Payments 

COVID-19 cashless payments

COVID-19 has not only completely altered our daily existence, but it has also pushed the balance strongly in favor of a cashless society. Our world may have been progressing in the direction of cashless currency as a primary means of economic transaction, but recent events have catapulted this movement forward.

COVID-19 has caused global mayhem, continuing to push the boundaries of just how much social distancing people can take. But in this strange climate of international shutdowns and limited travel, cashless transactions are proving to be extremely useful.

16. Cashless Options, the Benefits of Online Shopping

online-shopping-cashless-COVID

Cashless options enable consumers to feel more confident going about “life as usual.” Despite slow reopenings, many shops remain closed due to the pandemic, and contactless services help enable businesses to stay afloat. Though this transition to a cashless economy was already in process, since COVID-19 started, the bulk of commerce has effectively shifted to online transactions, as many people fear that bills can serve as a carrier for this deadly disease. In the United States, countless supermarkets are limiting the number of registers accepting cash, just one of many efforts to help protect their workers from becoming sick. Cashless stores have also become more prevalent, simply because in such precarious times, they provide proprietors with a greater level of peace of mind. The only remaining question is not whether the world will become cashless, but rather, what are the best solutions to realize this transition?

17. Conclusion

It may be have once been a futuristic dream, a vision of a world where one need only carry a small chip or card in order to gain access to every store and entertainment venue in sight, but a cashless economy is quickly becoming our reality. From hotels to stores, to restaurants, to sites of big-ticket purchases, as developments in cashless systems progress, so will our access to new ways of doing business, and to another kind of freedom.

A contemporary cashless economy will bring access to a newfound convenience, coupled with a more sophisticated system of security, advantages that are all the more reassuring in these most precarious of times. No matter the size of your company or organization, now is the perfect time to make the shift toward a cashless economy.

For those in the self-service industry, the available options for taking a step towards offering cashless solutions can be quite simple. Reach out and speak to a representative at Nayax to learn how your company can offer cashless payment solutions.