You’ve probably noticed that you’re using cash to pay for things less and less these days, as the popularity of paying with a direct debit or credit card has become more commonplace. Although there’s still some disagreement among experts on when we’ll fully transition to a cashless society, one thing is for sure – it is going to happen and it’s going to be relatively soon. But what does this mean to the average person on the street?
Below, we’ve answered the most common questions we get asked about how a cashless society could impact you and the way you make payments.
A cashless society is a state in which the means of exchanging value isn’t done with physical banknotes or coins. Instead, value is transacted through the transfer of digital information or assets between the participating parties exclusively – which is the key point here.
In recent times, the possibility of a fully cashless society has been discussed widely around the globe as the world continues the move towards using digital methods of recording and conducting monetary transactions. However, this has been accelerated by the COVID-19 pandemic, with citizens in most western countries and beyond being encouraged to use an alternative means of payment than cash – so we’ve been given a snapshot of what a cashless society might look like in the future.
Generally, there are 8 types of cashless payments available right now – and it’s likely that you regularly use 4 of them in your daily life. Bank cards, contactless payments, mobile wallets, and QR codes are self-explanatory, with the majority of the UK population using these mechanisms as their main form of payment today.
However, there are 4 other alternatives including POS devices which are used by merchants to mark the chosen goods and accept customers’ cards. You are likely to find these in your local convenience store by checkout. Gift cards and vouchers are also a form of cashless payment, where you pay for the value of the voucher upfront before redeeming the value of the voucher. The other two methods are Electronic Clearance Service (ECS) and Unstructured Supplementary Service Data (USSD), which are still very much in their infancy.
There are many key benefits that the transition to a cashless society provides. In theory, there should be lower crime rates as monetary transactions are much easier to track. Criminals often use cash so there is no record of transactions taking place. Also, there will be automatic paper trails again making it harder to conduct illegal transactions.
A cashless society will also be more cost-efficient for businesses to process money, as doing so generally costs money itself in the form of bank transaction fees, transportation, insurance, and thy threat of robberies, etc. Also, internal payments would be seamless compared to today’s standards.
Make sure you bookmark the Axcess Merchant Payments blog for more insights into the ever-changing world of payments. Our recently revealed review of payment trends in 2021 gave a snapshot of the technologies changing the way the world does business and how it will change the way you see payments in the near future.
If you are concerned about how these changes might affect your business, get in touch and speak with one of our payment experts today.
call us on +44 (0)113 819 7156 or send a message and we’ll be in touch as soon as possible.
