You may have noticed it yourself, you are asked by a charity collector to donate some money on your way to the grocery store. As you are willing to donate a couple of euros you find yourself not having any cash on hand. It is safe to say you are not the only one that, that is happening to.
More and more people find themselves not having any cash on hand when shopping, doing groceries or even when going to an event. There is a new growing tendency of people not carrying any cash around as it becomes more convenient to pay cashless. The exponential growth of the internet of things (IoT) has made countless of cashless payments possible. Possibilities range from debit/credit card, PoS systems or paying with the wallet app on your mobile phone to even paying with a QR-code (Emerce, 2017). At this point in time almost 75% of worldwide transactions are done through cashless payments. But the question remains, is the IoT evidently going to turn the whole society cashless and are we ready for this?
Certainly due to the current pandemic with COVID-19 people are urged to pay cashless to reduce the chance of the virus spreading. However, recent research shows that over 56% of the questioned people in the Netherlands are against going completely cashless in the near future. You would wonder why this many people are against going cashless as it is seemingly a more convenient way to pay. Well, there are several reasons why people would rather have access to cash on hand. The tangibility of cash and a certain grip on expenditures are one of those reasons. People feel that when they pay with cash on hand they have a better sense of what they are spending (Capterra, 2020).
However, it is seen that there is a certain correlation between the age of people and the acceptance of digital payments. This might have to do with the digital skill level of people. Research shows that the acceptance of digital payments and a cashless society is highest in the age range between 18 and 35 years old (Emerce, 2020). Generally this is the age class with the highest digital skill level which might clarify that age has something to do with the willingness to step over in a cashless society. Ultimatly only the future will tell if society is ready and willing to step over.
References
Capterra. (2020). Contant geld mag niet verdwijnen – Onderzoek onthult groei mobiel betalen. Available at: https://www.capterra.nl/blog/1707/contant-geld-mag-niet-verdwijnen-nederlanders-niet-klaar-voor-cashless-maatschappij.
Emerce. (2017). Met vreemde betaalmethoden op weg naar een cashloze samenleving. Available at: https://www.emerce.nl/best-practice/vreemde-betaalmethoden-weg-cashloze-samenleving.
Emerce. (2020). Is Nederland klaar voor een cashloze maatschappij? Available at: https://www.emerce.nl/achtergrond/is-nederland-klaar-voor-een-cashloze-maatschappij.
Thank you Myron! It is true that I never have cash on myself anymore! However, is this still a handicap in our every day life? The only way I sometimes use cash is when you want to hang your coat, you sometime have to give some coins. But other than that everything is way easier with cash. If you loose your cash, the probability go getting it back is very low. However, if you loose your card you can directly block it via your Bank App and just order a new one. I do not agree with the fact that you have more expenditure awareness with cash. In my opinion it is way easier to keep track of your expense on your bank app rather than with your cash! I believe that future generation will use less and less cash.
Hi Myron, thanks for bringing up this topic. Personally I think it is a super interesting trend that people are moving towards a cashless society. I like the fact that you bring up the number that 75% of the worldwide transactions are done cashless. I would wonder however, what percentage of the transactions would come from countries with a high income level. I would expect this number to be a lot higher. In addition, I am not so sure how reliable the numbers are, as I suppose a portion of the cash transactions are happening with being registered.
Personally, I think this is also a good reasons why governments are also supporting a cashless society. Without cash it will be a lot more difficult to make transactions without paying taxes.
Hi Myron, I made a small mistake in my first comment. I ment in the last sentence of paragraph one that a large portion of the cash transactions are happening without being registered. Excuse me for the mistake just noticed it
Hi Myron, thank you for your interesting post. I truly believe that the amount of cash people are carrying is deminishing. I have noticed it myself since i have been working in the catering industry for many years and see that the amount of tips consumers give is reducing. Especially now during COVID-19, people are motivated to do payments by card. They feel more safe when paying with card since there is no physical contact involved when handing over the money. With the increase of digitization, more and more payments are done online. For instance Tikkie, the free app to send payment requests, is a great example that contributes to the growing cashless society.
Another important reason why the amount of cash should be diminishing is criminal activity. The European Union already stopped printing 500 euro bills since they were mostly used by criminals. At most stores in the Netherlands, you cannot even pay with it.
I believe cashless payments will be the new standard. Now during COVID-19, the Netherlands and other European countries increased the limit of contactless payment, without entering your pin-code, from 20 to 50 euro’s. And we Europeans liked it. Also, during the lockdown, e-commerce sales increased drastically. People experience the convenience of online paying. Moreover, the introduction of the digital wallet (paying by phone) lowers the barrier even further for cashless payments.
It is still a long way to go, but the acceptance of cashless payment is increasing.
https://www.emerce.nl/achtergrond/impact-coronapandemie-ons-betaalgedrag
Hi Myron, very interesting blog post. Personally, I’m a big fan digital payment, it’s so incredibly convenient and not carrying cash is basically never a problem anymore. Apart from being convenient, there are a couple more reasons why I prefer digital payment. With cash, you can run out, you only have access to the money that you brought with you. With digital payment, you basically have access to all your money at all times. I certainly understand the older generations being hesitant to pick up digital payment, they have been using cash their whole lives and like you said, it gives them a better sense of how much they are spending. I think that this is the case for many people, but if you combine digital payments with budgeting or money tracking apps, it can give you incredible insight into your spending behavior. This would be much harder to track with cash payments. Digital payments bring their own safety concerns, however not being able to lose money by it simply dropping from your pocket is quite nice.
The option of cash payments should certainly stay around, but I’m very happy with the move towards digital payments.
Hi Myron, thank you for the really interesting topic you wrote about! It is a topic that almost everyone can relate to. I believe that a cashless society is arising due to the increase in technologies that make it possible. With the introduction of apps such as Tikkie and Apple Wallet people are more inclined to pay cashless as it is more convenient and easier to use. Moreover, people are not dependent anymore on the amount of money they are carrying which makes a cashless payment more convenient. Personally, I also notice that since the pandemic I do not really carry money anymore and cashless payments are quicker and safer, in my opinion.
I was surprised by the high percentage of people that are against the completely cashless. However, in my opinion, a cashless society will be in the near future due to digitalization and technological developments. Also, the cryptocurrency will have influences on the cashless payments and are also becoming more appealing to people. You could say that the cash payment sector is already being disruptive and probably will disappear. Nevertheless, you also could say that cash will always be among us since there will be people that do not trust technology or banks to have their money. To conclude, it is clear that the percentage of digital transactions will increase, therefore fewer people will carry money with them.