The COVID-19 pandemic has caused various changes. Consumers have adapted their shopping behaviour in many ways.
One big change has been the growth in card transactions and the following decline in people using cash.
The impact of a cashless society has been discussed since the advent of electronic banking in the 1990s.
In 1997 the Royal Bank of Scotland became the first British bank to announce a complete internet banking service and there is no denying that the future of retail, and the digital transformation of this sector has been accelerated during the pandemic, but does this mean cash is on its way out?
In 2020, card payments represented more than half of total payments in the UK. Estimates show that cash payments are now set to fall at an annual rate of between 2.3 and 6.2% across Europe.
What are the advantages of a cashless society?
You won’t have to deposit as much cash every day and can more easily balance their books. If you’re not carrying hundreds of pounds in cash, you’re less of a target for robbery. Handling cash is also expensive, so moving to cashless payments will also save businesses money and make transactions easier to track.
But what are the disadvantages?
With no cash system to fall back on, these kinds of security threats could potentially be devastating in a cashless society.
Did you know?
China has taken two steps closer to a fully cashless economy after two small private Chinese banks announced on Friday (Feb 4, 2021) that they would end services related to bank notes and coins, according to a South China Morning Post report.
It was also announced in late September 2021 that The Bank of Finland has predicted that it will be an entirely cashless country by the end of 2029 and there’s a lot of data to back up this claim. With 98% of all Finns owning a debit card and 63% owning a credit card, nearly the entire population can pay without using cash.
Does this mean we are heading for a cashless society?
Card transactions are increasingly common across Europe. Chip & PIN payments lead the way, with an 8% monthly increase in the three months after the initial lockdown restrictions eased.
Contactless payments have also accelerated as consumers have settled for this socially distanced method of payment. To help minimise contact with others, many locations increased the value-limit of contactless sales, which pushed this process even more into the mainstream. Financial giant Visa has reported growth in contactless payments across Europe, with 80% of in-store payments on their cards now contactless.
Does cashless shopping deliver good customer service?
The pandemic has caused stress and massive pressure on retail stores, but if they are to thrive in the new shopping era, it’s vital that they respond with processes that reflect the changing needs of consumers.
86% of banking executives worldwide agree that it’s important for consumers to influence the personalisation of their financial user experience. That’s why savvy retailers are exploring ways of taking payment that enhance the shopper’s personal experience.
Indeed, offering options that give customers the flexibility to pay using the method of their choice is now a key part of delivering good customer service, whether that’s using contactless technology or payment methods like Klarna or PayPal in store.
How can technology deliver a better customers experience?
Technology has changed our expectations as consumers – and retail stores are compelled to change in-line with rapidly evolving needs. Customers are now comfortable with the speed and simplicity of cashless transactions, are pushing retailers to develop solutions that address consumers’ other pain points.
For example, one of the biggest complaints that retail customers have is the length of in-store queues. Thanks to new technologies, most stores have a self-checkout station, for customers to use and the advantages that come within self-checkout are in-store productivity, better store capacity, enough cashiers and saves time for employees.
To conclude, is a cashless society a constructive concept?
Whether it’s mobile payment terminals that reduce check-out queues, digital ordering and payment points that streamline transactions or simply the hygiene benefits of not handling cash, the growing expectation that technology makes things simpler, easier, and faster is transforming the customer experience for all of us.
Flexible, contactless payment systems are at the heart of that change. And, increasingly, those businesses prepared to embrace the cashless revolution will be the ones most likely to succeed in the new retail landscape.
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