Today’s consumers want what they want, when they want it. With demanding work schedules and other life obligations, there are only so many hours in the day. So, when it comes to payment options at their favorite shops and venues, traditional cash payments no longer fit the bill. They’re time-consuming, slowing down everyone involved — customers and staff, alike.
With a 35% increase in digital wallet users by 2029 (a total of 5.8 billion users worldwide), businesses are embracing the digital payment revolution. Transitioning away from physical cash payments is not only more convenient for customers, but it creates a safer workplace for employees. Yet, at the same time, some critics warn about potential reliability or privacy issues, not to mention excluding unbanked customers.
In this article, we’ll cover the advantages and disadvantages of transitioning to a cashless society. And how Ready Credit’s cashless payment solutions are in a position to bridge the digital divide, by accommodating all customers, no matter their payment preference.
Understanding a Cashless Society
A cashless society is one where payment transactions occur with digital payment methods, rather than physical cash. In this case, businesses accept cashless payments with common tools such as:
- Traditional debit or credit cards
- Pre-paid debit cards
- NFC wearables
- Mobile wallets
- Cash-to-card kiosks (aka, reverse ATMs)
Countries like China, Sweden, and India have already made significant strides in embracing a cashless model. But what’s driving major global economies like them to evolve into cashless societies? Topping the list of answers are consumer preferences for fast and easy transactions and the emergence of evolving digital payment technologies that are meeting that demand.
The Pros and Cons of Moving to a Cashless Society
With any major transition, it’s vital to weigh the benefits and potential downsides. Transforming into a cashless society is no exception.
While such a significant digital transformation will affect everyone, from paying customers, businesses, and governmental entities differently, the way forward is with a balanced approach. And Ready Credit’s cashless payment options provide a hybrid solution, balancing innovation with inclusion for all customers.
4 Pros of a Cashless Society
1. Faster and More Convenient Transactions
Let’s face it — traditional cash transactions are time-consuming for customers and staff. The act of withdrawing and counting out cash is tedious, leading to unnecessary delays and frustration. Instead, a cashless society that esteems digital payment methods would usher in faster and more convenient transactions for everyone.
With tap-and-go contactless payments, QR code payment initiation, and cash-to-card kiosk, payment transactions become quick and seamless, significantly reducing queues at any point of sale. Making cashless transactions especially ideal for high-traffic venues, such as amusement parks, retail businesses, and public transport depots.
2. Reduced Cash Management Costs
Another major advantage of transitioning to a cashless society is the significant savings businesses and other venues will reap by eliminating manual cash management. Further, government entities and other institutions can drastically reduce overhead costs relevant to printing and disseminating physical currency.
Instead of spending time and money arranging for armored transportation and other manual cash-handling logistics, businesses can reclaim their time by focusing on improving the customer experience and other revenue-generating activities.
3. Enhanced Public Safety
With drastically reduced quantities (and inaccessible) physical cash on site, retail stores and other venues will experience fewer instances of robbery and embezzlement.
In other words, a cashless workplace is a safer workplace for staff. Rather than counting cash and reconciling their registers late at night, or assuming the high-stakes responsibility of transferring envelopes of cash for a bank deposit, employees will feel safer and less vulnerable without this responsibility on their shoulders.
Add to this the extra layer of security that comes from a real-time digital trail of all transactions, giving businesses and institutions peace of mind. So, if any type of fraud or theft were to occur, they’d have the ability to conduct a thorough investigation to reconcile the matter quickly.
4. Real-Time Financial Tracking
Consumers and businesses will greatly benefit from real-time financial tracking in a cashless society. For one, customers will have access to app-based instant spending and account-balance alerts. Plus, digital payment transactions mean they can easily track their expenses on the go, as well as plan and maintain a short-term and long-term budget.
Likewise, businesses in a cashless society will enjoy access to real-time performance monitoring, as well as analytics relevant to all sales transactions. Such an up-close (and bird’s eye view) of sales data and purchasing trends will inform key revenue-generating decisions like meeting customer demand for specific products and more.
3 Cons of a Cashless Society
1. Exclusion of the Unbanked and Underbanked
Not everyone has access to a traditional bank account or credit card, much less a smartphone or an Internet connection. The FDIC reports that as of 2023, 4.2% of U.S. households were unbanked, whereas 14.2% of households were underbanked. As you can imagine, physical cash is a necessity for the vast majority of these households. This is especially the case for consumers in rural and low-income areas.
On the surface, rapidly transitioning to a cashless society could appear to create transactional barriers, deepening the divide when it comes to social inequality. But, this doesn’t need to be the case when there are inclusive digital payment solutions available to ensure all consumers can purchase whatever they need in a cashless society, no matter their payment preference.
2. Privacy and Surveillance Concerns
When it comes to traditional cash payments, transactional anonymity is par for the course. However, in a cashless society, businesses, governments, and other institutions have the ability to store and track every digital transaction in their system.
For critics of a cashless society, such a vast digital footprint of consumer transactions raises privacy concerns and fear over financial surveillance and consumer profiling. To transition to and maintain a cashless society, strategies to protect consumer data and privacy must be a part of the equation.
3. Dependency on Technology
Even in a tech-driven world, there are four words that many customers will still hear at some point: “Our system is down.”
We’ve all been there. A cashless society dependent on technology remains at the whim of system disruptions, power outages, and even cyberattacks. Such barriers cannot only prevent access to funds but also cause unnecessary delays and annoyance, negatively impacting the customer experience.
Going Cashless: Pros and Cons for Businesses
Benefits of Going Cashless for Businesses
Businesses across most industries and sectors stand to significantly benefit by transitioning to a cashless model by:
- Foregoing manual cash handling and enjoying faster and easier reconciliation and inventory syncing.
- Experiencing drastically fewer instances of internal fraud and on-premise, cash-motivated theft.
- Improving and streamlining their financial management processes.
- Instituting digital tracking, enabling loyalty programs and targeted upsells.
- Streamlining staff duties for faster checkout procedures, improving the customer experience.
- Providing an inclusive financial transaction experience (and inclusive business) accessible for all customers.
Challenges of Going Cashless for Businesses
While the benefits of a cashless model are plentiful, there are a few challenges businesses will want to be aware of, including the following:
- As with any major transition, there will likely be setup or installation costs, in this case with POS terminals and software upgrades.
- Some customers may experience a slight learning curve with the transition, so making educational materials/signage available may prove necessary.
- In the event of a power outage or cyber attack, businesses will need to have a contingency plan in place.
- Older or tech-resistant consumers may be resistant to some cashless payment options.
Digital Payment Systems: The Foundation of a Cashless Society
Inclusive digital payment systems are at the heart of a cashless society that doesn’t just exist but thrives. Consumers enjoy access to various digital payment options they can pick and choose from, depending on their needs or preferences (including those that accept cash):
- Contactless POS systems
- Cash-to-Card® Kiosks
- Debit and credit cards
- Cryptocurrencies
- Reloadable digital wallets
- Mobile payment apps
- RFID wearables
Of course, there will still be customers in a cashless society who prefer (or must use) cash. Ready Credit’s Cash-to-Card Kiosks are an inclusive payment option for cash-toting customers, ensuring no one is left behind in the cashless transformation.
No matter what, for a cashless society to succeed, businesses and venues must have access to flexible, easy-to-use digital payment systems that can adapt to and withstand their ever-evolving needs over time.
Who Benefits Most from Going Cashless?
Everyone benefits when businesses go cashless in an inclusive way, meaning when all consumers’ payment preferences are accommodated. Let’s examine several demographics that will benefit:
- Unbanked or Underbanked consumers: Can easily convert cash to a pre-paid debit card.
- Travelers: Safer than carrying local currency, transactions are trackable, and currency conversion is easy.
- Urban consumers: Used to mobile-first services, and prefer contactless speed.
- Retail stores: Expedited register lines, more time to improve customer experience, and boost loyalty.
- Restaurant and Hospitality businesses: Staff enjoy fast, cashless payouts and zero manual cash-handling duties.
- Large event venues: Higher throughput, access to centralized analytics, and fewer instances of targeted theft and embezzlement.
Inclusive Cashless Transitions with Ready Credit
A successful cashless society that can withstand the test of time is an inclusive one that accommodates all consumers. Ready Credit’s digital cashless payment solutions are accessible to all customers, helping businesses earn their loyalty over time.
Here is how our cashless payment solutions accommodate all customers and will make the transition to a cashless model easier, faster, and long-lasting:
- Our user-friendly, ADA-compliant cash-to-card kiosks are fully accessible and ideal for all customers, businesses, and venues.
- Unbanked and underbanked consumers are empowered to participate equally in payment transactions everywhere.
- Wearable digital wallets, such as wristbands or badges, expedite payments, allowing for smooth and frustration-free transactions.
- Our pre-paid ReadyCARD®, a hybrid cash-to-card payment method, will allow cash-only customers equal opportunity to make purchases anywhere major debit cards are accepted in a cashless society.
- For those who value privacy, ReadyCARDs can be purchased and used anonymously—no ID, registration, or bank account required. Customers can load cash at a Ready Credit kiosk and use the card immediately, with no personal information collected.
- Ready Credit Kiosk Solutions help businesses comply with cash acceptance laws, including in states and cities that ban fully cashless operations. Customers who prefer cash can convert it to a prepaid debit card at the kiosk, so your business stays compliant while serving everyone.
Final Thoughts: Is a Fully Cashless Society the Future?
A fully cashless yet payment-inclusive society is possible for all, and hybrid payment models are lighting the path toward a successful transition.
Not only will a cashless society speed up financial transactions, but businesses will reap the long-term benefits of superior efficiency and greater customer loyalty. With financial transactions fully traceable and manual cash handling non-existent, companies will experience (drastically) fewer instances of cash-motivated theft and embezzlement.
Of course, while some critics cite legitimate concerns about financial profiling and surveillance, businesses are always studying their customers’ spending habits, regardless of their payment methods. But for those who argue that a fully cashless society would exclude a significant percentage of the population who rely on cash only, there are clear, inclusive solutions available that will provide maximum accessibility for all consumers.
