Electronic payments in favour of cash are steadily gaining popularity in today’s financial landscape. This can largely be attributed to fintech solutions, improved accessibility, and a change in consumer appetite.
Countries all over the world recognise a need to develop catalytic opportunities, and to deliver digital financing into banking systems, capital markets, tax systems, and households. Sweden is set to meet its ambitious goal to go fully cashless by 2023, while Finland has set the same goal by 2029. Other countries like Norway, Canada, China, the UK, Australia and South Korea, are also well on their way to reducing cash dependency.
Cashless societies offer the convenience of having instant access to your cash holdings, no matter your location. Going cashless means the end of cash-based criminal activity. Carrying or storing cash can be risky for both consumer and seller. The risk of cash robberies is negated by electronic payments. It also becomes more difficult to hide income and evade tax when there's a digital record. Cashless societies are also more environmentally friendly and allow consumers to track their expenses better. Going cashless helps businesses understand more about consumers and provides them a more personalized experience. Other benefits of cashless societies include lower costs and fees, especially as they relate to governments printing money, to businesses storing, depositing and safely transporting cash, and to consumers withdrawing or depositing cash. Cashless societies foster economic growth. In developing countries – and particularly in the informal sector - cashless transactions enable money traceability, which reduces slippage and improves market visibility.
Most significantly, the transformation of money transfers, payments and banking services, and cashless transactions can help close the financial inclusion gap. Global payment ecosystems are on the verge of massive transformation, and while neo banks and digital banks may not replace traditional banks in the near future, they will offer new paths for people to receive financing if they are underserved by traditional banks. In developing nations, cashless technologies can deliver life-changing socio-economic benefits, and create a more equal world.