A global cashless society already seemed somewhat inevitable at the end of 2019. With most nations around the world catering to tap-and-go, mobile and online payment options, the reality of a completely cashless world didn’t actually seem too far off.
Today in 2020, with major shifts taking place every day right before our eyes this reality seems even closer. We’re now seeing even more momentum towards a cashless culture with thousands of businesses rolling out new cashless payment methods, and some even outright refusing cash payments, due to hygienic precautions.
Moving Towards Digital Currencies
We’ve already seen some of the world’s most developed nations taking this change very seriously, with central banks around the world discussing the introduction of digital currencies within the next five years. Whether these currencies will replace or complement physical money is still to be decided, but it’s clear that governments are responding to this largely global trend.
The US in particular has had further discussions in recent weeks about the reality of a digital dollar, to reduce the spread of potential infections through coins and notes. This came after China conducted a ‘deep clean’ on much of their physical cash stockpiles to reduce the chance of viral spreads.
Meanwhile, central banks in the United Arab Emirates, South Korea, Canada, Singapore, and the European Union, have also been exploring ways to introduce a digital currency for its citizens.
What Can Businesses Do?
Businesses in multiple sectors have been providing cashless payments for years, but many have not until today. In specific areas where large volumes of cash are regularly exchanged, such as retail, hospitality, self-service and ticketing, there is now a large move towards adapting services to meet changing consumer habits.
Many large, more established businesses already have robust digital and online payment networks that can handle high volumes of cashless payments; however, smaller businesses will also need to adapt their systems to survive.
As consumers across the world avoid physical money exchanges more and more, businesses that can still operate effectively without their staff needing to handle coins or banknotes will most likely have a an advantage over those that can’t.
The Long-term Impact of a Cashless Society
The advantages of going cashless include faster and easier payments that require you to carry less physical money around in your wallet or purse. With mobile payments, people can further streamline their pockets by paying for items just with their phone, by using one of several popular e-Wallet and mobile payment methods. All this and more have contributed to a gradual trajectory towards digitised payment systems, especially across younger demographics in urban areas.
Some experts believe that moving completely to a cashless culture will endanger segments of society who rely heavily on physical cash, such as the elderly, however alternatives to cash are being facilitated by governments all over the world and in the Middle East. Payment options such as mada debit cards in Saudi Arabia and meeza debit cards in Egypt were launched as a shift towards financial inclusion, leading to long-term benefits that come with digital payments such as reduction of black market activities and less financial crime.
Future Consumer Behaviour Trends
Cash might simply be suffering a short-lived disruption today, but overall consumer demand indicates that we’re steadily moving towards a more permanent shift away from physical money. For businesses across MENA and beyond, it’s crucial to start considering your cashless payment strategy and e-payment options to give yourself the best chance of maximising sales and enhancing the user experience.