Cashless society draws closer to us than ever. As smartphones become more accessible even in developing countries, mobile payment has gone viral around the globe. People no longer need to carry their wallets and have time to wait for an international wire transfer that would potentially take days to execute. Banks are slowly shutting down their branches and ATM machines in favor of going entirely digital. Is “cash is the king” still true to you? At this point, in some countries, the digital payment might have beaten the cash king.
Britain: An Impending Transition Of Cashless Society
In Britain, contactless and peer-to-peer payments exploded in popularity during the pandemics. The number of digital payments increased by 12% during 2020. Contactless payment avoids touching banknotes and coins, which mitigate Covid-19 transmission worries to many people. On top of that, multiple months of lockdowns promote e-commerce sales causing the number of payments made using cash to drop by 35% in 2020. About 2.1 million people using notes and coins for daily purchases in 2019 fell to 1.2 million in 2020. Many retailers, for example, Ikea and Birds Bakery, temporarily or permanently accept card-only transactions. The UK government is well aware that a cashless economy is the way to go. A decision was made in April 2020 to increase the upper limit for tap and pay from £30 to £45 with a vision of rising to £100 in the near future. An impending transition of cashless society is ongoing in the UK.
Sweden: The World’s First Cashless Nation
While Britain is speeding up to digitize money, Sweden has decided to become the world’s first cashless nation by March 2023. Back in 1661, Sweden was the first country in Europe to introduce banknotes. And now in 2021, Sweden’s Central Bank has launched its own digital currency: The e-Krona, to seize the potential of money digitization. According to the Swedish Central Bank, more than 99 percent of retailers accept cards and over 80 percent of all transactions have been paid electronically. Only less than 13 percent of Swedish citizens still rely on cash. Instantaneous mobile payment platforms such as Swish and iZettle, accelerate person-to-person payments with QR codes in daily purchases and more Swedes can enjoy a cashless lifestyle. Meanwhile, Swedish banks issue debit cards to citizens aged seven years or older, which encourage them to shop online and adopt mobile payment at a young age. A highly strategic policy consolidates Sweden’s position in the financial technology industry.
China: E-Wallet Replaces Card And Cash
Despite the technologically advanced nations, China is also rapidly moving towards a cashless society. With the growing concerns of counterfeit money, China experienced a merchant payment revolution. This new payment system replaces any cards or cash and challenges the unshaken position of national banks. Unlike the west, which relies on card-based systems, the big tech companies Alibaba and Tencent have their own payment systems to process in-store and e-commerce payments, which are decentralised from the state-run Banks. Just under a decade, it has accumulated over a billion users on each platform. Nowadays, a Wechat or Alipay e-wallet is essential in Chinese daily life. It pays for absolutely everything, from fresh vegetables to expensive jewelry, with simple QR codes. It has been successfully adopted by mainstream society.
Cash is slowly disappearing and at one point, our next generation can only see a banknote or coin in a museum collection. Different incentives and policies have promptly shifted countries into cashless societies. Are you ready to be part of it?