Cash circulation is on the decline. It won’t happen overnight but we are surely heading towards living in a cashless society. Already, we receive our paychecks via direct deposit, pay taxes and bills online, and manage our savings accounts and shop online too. Our money is just a bunch of ones and zeroes changing on the computer. World economies have been evolving for centuries, so it’s not surprising that the way our economy operates will not stay the same.
There are already numerous institutions and organizations that don’t accept cash and this trend is on the rise. If you wish to purchase a meal on the airplane, rent a car, check into the hotel or attend a spa, you need a credit card. It’s easier for both consumers and for merchants. Consumers are protected from fraud and merchants enjoy reduced risk of the employee theft, which is one of the most common theft types for small businesses. In a cashless world, there is much less room for illegal activity and there are less ways to take advantage of the system. Imagine how much harder it would be for a robber to hold up a gas station that doesn’t accept cash or for someone to bribe an official with an easily traceable bank transfer. A cashless world is far more secure and safe for the general public. Scandinavian countries, for example, have already adopted the idea of a cashless society, and since then bank robberies and mugging incidents have declined significantly.
A mobile wallet stores customers’ credit and debit card information in a digital form on their mobile device, so instead of using an actual card, consumers can pay with their smartphone or smartwatch. This is not entirely futuristic as many people already use mobile wallets, but it is quickly becoming the most common way to pay for the purchases. When we don’t always carry cash we always have our phones with us.
For generations, parents have shown their kids how to manage money with piggy banks that taught young children about savings, large purchases and other important financial decisions in life. With cash being on the decline, progressive parents are making the switch to digital cashless moneyboxes to educate their children on how to handle money. These digital cashless moneyboxes are boxes that have a digital screen showing how much money this box has and it’s connected to the app on the parent’s smartphone. Basically it’s a primitive version of a grown up bank account to prepare children to deal with a cashless world.
Cryptocurrency (digital money) is the next step in the money evolution. Cryptocurrency concept is based on cryptography. It’s a combination of software and currency based on the global knowledge of transfers that collectively confirms who owns what cryptocurrency and how much they own. Bitcoin is the most well-known cryptocurrency. Bitcoins are created by code and the individuals who help generate bitcoins (using specialized hardware) are called bitcoin miners. As cryptocurrency becomes more common, consumers are able to purchase all kinds of things with it starting from buying sushi at their neighborhood shop to buying a Tesla vehicle. The largest bitcoin transaction so far was processed in November 2013 and amounted to $147 Million US dollars.
Blockchain Technology is used to reduce uncertainty when digital transactions take place. Once the information is added to a blockchain database it cannot be changed, thus making the exchange of value safe. Blockchain technology is a decentralized database that stores the information on all assets and transactions. It’s a public registry of who owns what and who transacts what. Transactions are secured through cryptography and with time those transactions get locked in the blocks of data and thus create an unforgettable record across the network. These blocks are replicated on every computer that’s used in that network, which makes it easy to track changes. Blockchain offers better visibility into ownership of digital assets, contracts and so forth. The main goal of blockchain technology is to monitor and validate digital assets while adding transparency and creating trust.
We are still years away from the day we stop using cash completely, but research shows the majority of people never have cash on them anyways. Looking for an ATM nowadays is seen as an inconvenience. For many, their cashless future has already arrived.
Tedd Huff, VP of Products, is a 19-year veteran of electronic payments, providing businesses with strategic and tactical direction by enabling a value-driven user experience. His goal is to simplify the complexity of payments and promote growth in emerging markets through fields such as mobile payments, e-commerce solutions, online fraud prevention and security. Tedd has headed a FinTech startup and delivered innovation and process improvements for multiple dominant payment organizations. As Vice President of Product for GlobalOnePay, Tedd heads up a team of global payment specialists, helping businesses grow faster by accepting a wider range of payments from virtually any market in the world.