The volume of contactless, cashless transactions greatly accelerated due to the ongoing pandemic. Businesses around the world are pivoting to address this shift in consumer spending habits. As the saying goes, money makes the world go round. Now, money is constantly changing hands in the digital world.
The various advantages of cashless payments have made our lives easier in this new normal.
Cashless Society Offers Safety
Contactless payment transactions allow us access to what we need and want while minimizing risks and maintaining our safety. This is just one of the many benefits of a cashless payment system.
In an article published by Nayax last July, the international Fintech firm enumerates 17 ways we have transitioned into a cashless society. The following are some examples:
- Food Retail and Food Service
When the entire world went on lockdown, essential goods and services like grocery stores and supermarkets remained open. The international food retail industry adopted protocols to prevent the transmission of COVID-19, improving their sanitizing procedures to safeguard customers and employees.
Several grocery chains in the US have integrated “checkout-free technology” in some of their branches. According to CNBC, supermarket chain Wegmans first tested its self-checkout application at 3 stores before the pandemic, then implemented it in 80 of its 103 locations to address the demand for contactless shopping options.
The food service sector was one industry that was heavily affected when the pandemic started. Most businesses are trying to bounce back without compromising their customers’ and staff’s safety. After several months of lockdown, bars and pubs across England asked patrons to use NFC (near field communication) cards and other contactless payment options.
In Singapore, Aaron Chiew, UOB group retail head of mobile and digital informed The Straits Times that online shopping using cards increased by 44% in the first quarter of 2020 compared with the same period in 2019.
In Toronto, road and transit agency Metrolinx stopped accepting cash payments last March 2020, encouraging people to use tap and go cards instead. Additionally, Canadian transit authorities that use Moneris’ Open Payments for Transit are planning to make way for fare payments via debit transactions in addition to credit.
- Arts and Entertainment
When the Rijksmuseum in Amsterdam reopened last June, it adopted a cashless payment system to shorten their ticket queues. In the US, drive-in theatres became popular again, with contactless ticketing systems offering a safer experience for their customers.
Disney World also provides amusement park visitors with a variety of cashless payment options like Disney tap-to-go cards, debit cards, credit cards, and wearable bands.
- Spectator Sports
In March 2019, the Mercedes-Benz Stadium (MBS) in Atlanta, Georgia, went totally cash-free and saved more than US$350,000 in operational expenses in just a single year.
MBS representatives also held an online conference to share their key tactics for transitioning to a cashless transaction model. It was attended by more than 900 sports and entertainment representatives.
Pros of a Cashless Payment System
What are the known benefits of a cashless payment system?
- Takes less time and effort
Cashless payments make transactions much faster. You don’t have to wait for your change whenever you pay for products or services. No more waiting in line to settle utility bills in a crowded payment center. You simply tap or swipe your card in every transaction. As more and more users are going cashless, expect queues at stores and business establishments to decline.
- Minimal or zero fees for currency exchange and withdrawal
Cashless payments also allow you to save more. Some banks let you make digital fund transfers or payments for free. While some online overseas payments still charge additional fees, they’re not as steep as the charges from the usual currency exchange channels.
- Access to your account anytime
When you use apps and websites, you can easily track your spending. However, this isn’t always the case for cash transactions. Checking your account balances or visiting the bank usually takes a lot of effort. Using contactless payment enables you to create an account that gets updated in real-time. These digital platforms allow you to view your transaction history, check your statements, and get notified of any activity made in your account. They also give you access anywhere and anytime you want.
Disadvantages of Cashless Payments
Here are some cons you may encounter with cashless payments:
- Encourages you to overspend
Cashless payments won’t completely eradicate impulsive shopping. If you mishandle your online account, then it will only mirror those random purchases you made using cash. Since you can easily access your digital accounts, then you can also use them for spur-of-the-moment shopping sprees.
- Payments may not reflect immediately
Online payment transactions happen too fast. In just minutes, you can pay your bills from your home or check out that item on your shopping cart. Although, some payments have to undergo various processes within a few days. You might be surprised to find some changes in your statement after making a purchase you forgot you’ve made several days ago.
- System errors
Contactless payment provides a streamlined approach to making purchases. We always expect digital processes to be smooth sailing and highly convenient.However, like humans, technology isn’t absolutely error-free. There are system glitches that can frustrate users.
Are Contactless Payments Here to Stay for Good?
A safe and convenient way to purchase is what everyone needs right now. It’s a silver lining in this ongoing global pandemic. This health crisis may have encouraged companies to go digital, but will customers still use cashless payment options when this pandemic is over?
According to Jeremy Soo, DBS head of consumer banking group in Singapore, “If the consumer experience is safe, fast, and good, there’s no reason why the user will ditch it and go back to something that is not as seamless.”
If a cashless society prevails, then it must protect the rights and privacy of consumers and uphold the economic interests of artisan brands and global retail chains.
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