Technologies’ Impact on Currency: Is Cash Still King?
With frequent trips to the ATM, fumbling around with change and noting how dirty money is, it’s no surprise that people are embracing a cashless society. Over the past decade, technology has advanced to the point where financial transactions of all types can be processed digitally.
The implications of a cashless society are vast. There are many benefits, such as eliminating black markets and allowing easier monetary policy. But there are also many concerns when all transactions can be monitored and manipulated. No matter where you stand, as e-commerce becomes even more prevalent, cash is on its way to becoming obsolete.
Businesses need to be ready to accept and take advantage of multiple forms of electronic payments. The list of alternative payment options is continually growing. There are digital wallet solutions, peer-to-peer money transfer services, and payment networks platforms.
Continue reading to learn more about each of the above mentioned alternative payment methods.
Digital wallets store payment details electronically on a smartphone or computer. Users can check out both online and in-store instantly with the tap of a key. Users also enjoy peace of mind through extensive security measures that accompany digital wallets. Many digital wallet services allow merchants to showcase specials, integrate loyalty programs, and receive money for commercial payments. Services like Mobile Wallet Marketer allow merchants to create and distribute specials and loyalty programs throughout the digital wallet community.
Peer-to-peer money transfer services
Peer-to-peer or P2P money transfer services are rapidly gaining traction. Globally the volume of P2P payments is over $1 Trillion! These services function like wallets; users store funds in their P2P account until sending a payment or offloading to a linked bank account. The days of I-O-U’s are coming to an end. Pure P2P services are not used for commercial transactions, however there are hybrid services, like PayPal, that allow merchants to quickly create and send invoices, accept payments and use a plug-in card reader.
Payment networks allow any business or person to send, request, and accept money, without relying on credit cards. Once users connect their bank accounts, money can be moved, usually at a very low rate. Many networks also offer e-commerce buttons on your website. Dwolla is a new payment network company that is very popular and has all the above-mentioned features. Many existing established financial institutions are also creating their own payment networks to compete in this growing market. Visa and Mastercard both have their own solution to receiving payments and simplifying check-out.
A cashless society would appear inevitable. A 2015 study conducted by Business Insider found that 40 percent of millennials surveyed would give up cash entirely if possible. According to Entrepreneur.com, Sweden expects to be cashless in the next five years, and Denmark has openly pledged to eradicate cash entirely by 2030. Digital transactions have a long list of benefits for both individuals and businesses. Embracing the looming shift will speed up transaction times for customers and increase sales opportunities for businesses. Regardless of your stance on the matter, preparing your business’s infrastructure to accommodate digital transactions will have positive ramifications for years to come.