The following is a post by Stacy. Enjoy!
What is cashless?
By definition cashless means handling financial transactions without money. Instead, plastic money (debit or credit cards), transfers and checks are used.
Not far behind the ‘wireless’ trend is the cashless trend. Taking cash out of our daily lives and wallets is happening fast. Changing consumer habits in shopping and banking are at the forefront of cashless. This has led to the creation of numerous cashless payments.
Cashless first became popular in the 1990s, thanks to electronic banking. By 2010 the use of alternative payment methods had risen to over 50%. Global tech giants Amazon and Apple are among the biggest drivers for a ‘cashless society’. A ‘cashless society’ is one where promissory notes and cash money are not used in any financial transactions. In history, there are many examples of ‘cashless societies’. These past societies used a barter system rather than cash. This allowed for both valuation and exchange of goods and services. However, current perceptions of ‘cashless societies’ are completely different. Rather than looking back to barter systems, people look to digital currencies such as Bitcoin. Given the uncertainty surrounding Bitcoin, this perception may need to change.
Popular cash alternatives:
As mentioned earlier, the most common cash alternatives are debit and cred cards. Often referred to as ‘plastic money’, they are most popular cash alternative. In the US almost 71% of the population has at least one debit or credit card. When asked, the majority of Americans said they use card payments for grocery shopping and online shopping.
Besides ‘plastic money’ there are many other payment methods. iDebit is a popular cashless payment method. Created in Canada, iDebit works like an e-wallet. When enacting an online payment, users simply need to look for their logo. How does it work? iDebit bypasses the need for cards and takes consumers straight to their internet banking. Consumers can then log in to their internet banking and approve or reject the payment. IDebit also allows consumers who have not signed up, to use a guest checkout feature. Fast and secure, overtime payment methods like iDebit may dominate online shopping.
Bitcoin is perhaps the most publicized cash alternative in modern times. Part of the cryptocurrency family, Bitcoin is the most well-known. However, several market crashes and upcoming regulation is holding Bitcoin back. While the idea behind Bitcoin as a cash alternative is interesting, more development is needed.
Which countries are cashless?
As of yet, no country has gone completely cashless. Canada and Sweden are two countries leading the cashless trend. The United Kingdom is also at the top of this list. Research which was undertaken by Forex ranked countries for six metrics. These metrics included: the number of credit and debit cards per person, the number of contactless cards in circulation and the number of people aware of what mobile payment options they have.
The Top 3 most cashless countries:
- Canada
- Sweden
- The United Kingdom
Canada comes in at number one of the Forex list. 57% of payments in Canada are cashless. In Sweden, 59% of all payments are cashless. Lastly, in The UK 51% of all payments are cashless. Other countries that made it into the top 10 include Australia, China, France, Germany, Japan, The US, and Russia.
Advantages of going cashless:
While going cashless is still a long way off, the benefits are already apparent. On a global scale going cashless will help fight money laundering. Terrorism, trafficking and money laundering all rely on cash. Without cash, the fight against these problems could get easier.
On a more local scale, going cashless will be more convenient for shoppers. Imagine no longer needing to queue at an ATM or wait for change.
