We live with a virtual environment where the technology of the mobile phone rules and shapes our lifestyle. These gadgets provide consumers with instant and convenient ways to get access to data, promos, social networks, shopping sites, banking institutions, payment methods, and more.
The role of cash
A logical question on a lot of people’s minds is whether cash will have a role in our society and what the future holds for physical money. It might seem paradoxical, but the increasing digitalization of money may create cashless societies but still make it necessary to use cash in certain developing countries. For more than a decade, numerous specialists and analysts had been forecasting the imminent disappearance of cash and the rise of its alternative payment methods such as credit and debit cards, online payments, and mobile payments.
Cash payment transactions
It is anticipated that money could become outdated in ten years. However, this may not be the case. In most nations, cash payments still account for the majority of payment transactions. Globally, more than eighty percent of consumer payment transactions are made in cash. There are certain banking institutions, debit and card businesses and other payment providers of electronic payment methods do believe that the trend is that banknotes and coins will disappear. The high value of handling cash is to be replaced by digital money in order to reduce costs.
Advantages of using cash
Cash is the handiest legal tender, and because it is acceptable by offline traders, there is no pressure or obligation just to accept digital payment instruments. Cash is nearly effortless to use and does not need any unique infrastructure to make a payment transaction, unlike credit and debit cards that require the POS terminal and the way to process the payment. Cash is accessible to everyone, and it enables those who do not have a financial institution account to be able to store, pay, and receive funds.
Cash is considered the only payment instrument that ensures the consumer’s anonymity, as all electronic transactions are traceable. Many desire their transactions to be untraceable even if they are not doing anything illegal. Because cash is tangible, its usage as a payment method is better for control in their finances for those who have problems to make ends meet. The downside of digitalization of money and connectivity is that people need to keep financial transactions private, and that will not happen, because there are records that are automatically held. However, the encryption of data and privacy regulations that make those who use digital money have the assurance that their financial transactions are kept as securely as possible.
Every payment instrument has its advantages and disadvantages. In a competitive market, various payment instruments and advanced payment solutions must co-exist to fulfill consumer demands. However, it is always the consumer choice that will make them choose what payment instrument to use. It is the individual that will choose the payment method, based on where their funds are and what makes them get to pay with ease.