As technology continues to advance, so does the way people tend to pay for goods and services. As digital payments become commonplace, the notion of a cashless society is no longer a distant dream - it has become a pending reality. This article will explore the current state of cashless society and digital payments, looking at how traditional payment methods such as cash and cards make way for new, more efficient options such as mobile and contactless payment. It will also discuss the potential implications of a cashless economy, as well as highlighting some of the key challenges that need to be addressed.
Cashless Society: The Digital Payment Technology and Challenges
The world is undergoing an accelerated transition towards a cashless society marked by digital payment technologies and digital transformation as a result of the technological advancement and globalization. The cashless society is enabled by the rise of contactless payment technologies, such as debit and credit cards, digital wallets, QR codes, USSD (short codes used by banks to facilitate mobile banking) and online banking. The acceptance of cashless payment technology has brought about a variety of benefits, such as reduced transaction costs, improved customer experience, and increased security. However, it has also created a number of challenges, particularly for the underprivileged who may lack access to these digital payments.
The Impact of Cashless Payment on Credit Provision to the Underprivileged
A study examining the impact of cashless payment on credit provision to the underprivileged has concluded that an increase in the availability of digital payment options has resulted in African countries reducing their reliance on traditional credit sources, and using digital payment platforms instead. Mobile cashless payments have also been found to be a viable source of credit for borrowers who may not have access to traditional financial services, such as those living in rural areas, and those without access to banking services. The study also highlights the importance of credit education among these segments of society in order to help them fully reap the benefits of digital payments.
The Emergence of Cyber Insurance and Other Considerations
The emergence of cyber insurance has created a new product segment for cashless economies, and with it, a new set of risks and challenges. Rapid innovation and adoption of technology, without proper assurance of security, can become a major problem for financial institutions. In addition, there are a variety of considerations to bear when transitioning to a cashless society. Facilitating access to cash and an equitable infrastructure of digital payment technology must be investigated, as noted in the ‘Access to Cash Review’ Final Report. Furthermore, the digital banking experience, sustainability, fraud and security of payments, especially in relation to vulnerable and minority groups, must all be taken into account.
In conclusion, cashless payments bring about numerous advantages, such as convenience, security and cost-effectiveness. However, the transition to a cashless society must be monitored carefully to ensure that access to cash is maintained for all members of society, regardless of geographical location or economic status. Although large strides have already been made, technological advancements will need to continue in order to ensure an equitable and secure system of digital payments.
