It’s time for Americans to bid goodbye to the cash economy

Posted on 20 Dec 2016 by Admin     
It’s time for Americans to bid goodbye to the cash economy

By Anand Rajendran

Cash is the major aspect of business life over the world for many years, even since from the ancient times it has been used by the people. It was considered as a basic key element for import and export merchant all around the world. Cash may be existed in various forms such as coins and paper notes with different size, structure, color and value. It can be referred by different names in different countries like in India- it was called as ‘rupees’, whereas in America- it termed as ‘dollars’.

From smaller transactions to longer transactions, everything was made by cash in all the nations for many decades, which were considered as a traditional method. Money was printed by the respective government and printing of fake notes considered as a big crime in all the countries. All the money holders should pay taxes to the government with respect to their assets, if there was anyone who hides their assets illegally and did not pay any tax, it will be considered as a ‘black money’. All the purchases of land, jewels and vehicles should be registered with the government to obtain the license, otherwise it will not accept as legal.

Cashless transaction

Due to the development of technology, today’s world has lots of options to made payments other than money, like credit cards, debit cards, online wallets, etc. These transactions do not need any cash in your hand; it just needs money in your bank account itself. The payment made without any coins or notes and operated by means of using digital cards or electronic transfer of funds, it will be called as cashless transactions or non- cash transactions. Cashless transactions were made through these cards- debit cards, credit cards, prepaid cards, mobile wallets, net banking, online transaction, etc. Most of the developed and developing economies encourage digital transaction to control black market and illegal activities that often affect the growth of the nation.

America’s goal to achieve cashless technology

In Sweden, only two percent of payments were done by cash and experts predicted that, because of the use of credit cards and electronic payment, there would be a great fall in the use of cash for transactions. This rate will be reduced to around 0.5% within four years and Sweden’s central bank considers to introducing a digital currency.

Both Sweden and US are equally advanced, but America has not implemented cashless transaction till now because of the lack of trust of people towards their government. In Sweden, people entirely trusted their government, but the situation was not same in the USA where about 19% people only have belief in their government.

Another reason behind the non-implementation of cashless society was that they were feared about the privacy of online banking. According to a survey taken in 2014, there are about 71 percent of people worried about the privacy policy of online payment.

The sign which showed the less cash transactions of Americans was the rise of mobile payments. Venmo, a mobile payment service owned by Paypal was handled 20 billion dollars this year where it has handled only 7.5 billion dollars in the previous year. But still 20 billion dollars were only 0.17% of the total expenses made by Americans in the same year, whereas expenses were around 11.5 trillion dollars.

United States of America cannot reach the cashless society immediately and it may take some more years to achieve the goal. Sweden was not as big as the USA where Sweden was 13 times smaller than America and population in Sweden was very less when compared to America, so it is impossible to eliminate cash in US in a short period of time.

Cashless countries

Sweden

Sweden was going to be the first nation to become a cashless country which could be completely eliminated the use of cash, where cards are king on this nation. In Sweden, cash was not accepted in public transportation, even street vendors refused to accept cash or coins and churches also preferred to accept cards or mobile payments. Shops in Sweden have made 40% of cash transactions for five years ago, but now it rarely has 20% of cash transactions. In 2015, Sweden people used cards more than thrice of an average European used the cards; it makes an average of about 207 payments for each card.

Recent developments in mobile technology also contribute a major role in the growth of a cashless society. Many mobile phone apps were used for transactions in real time, which is cost and time effective. Lots of mobile apps were available in the playstore or appstore for electronic transactions developed by both bank and private sectors.

Major Banks in Sweden including SEB, Nordea, Swedbank, Danske Bank, Handelsbanken jointly developed a mobile app called ‘Swish’, a well- known app used to transact money from one bank account to another account. This was adopted by nearly half the population of Sweden and makes more than nine million payments in a month.

iZettle was another app commonly used by most of the small businesses and street vendors to accept the card payment. This app operated through a mini card reader that inserted into the smartphone and then processed for payment, but no any information will be stored in the phones.

United Kingdom

Britain was on the path to a cashless society which banned cash on the buses in 2014 and 99% of people adopted to use contactless payment, prepaid tickets, concessionary tickets or Oyster. Transport for London (TfL) stated that removing of cash from bus network will increase the efficiency and helps the people to get quicker service and added that it will save about twenty four million pounds in a year for the transportation commission.

In the UK, 64% of cash transactions were made in 2005, but it in 2015 it has fallen into 45.1% and it was expected to fall just a quarter of this rate by 2025. Contactless payments grew drastically in 2015 where more than a billion transactions over the year.

Denmark

Most of the Danish uses mobile apps for transactions and payments through their smartphones, which was about 90% of mobile users. MobilePay, an official app by Danske Bank was the most preferable mobile app used by many of the Denmark people for payment and transactions. Denmark government has advised small retailers and traders to accept electronic transactions and to avoid using cash.

Some other digital payment options are England’s Paym, Google wallet and Apple’s Passbook were commonly used by the people and there was a prediction that Nordic nations would become cashless within a decade.

Canada

According to a prediction by Moneris Solutions Corporation, Canada will make only 10% of cash transactions from the overall money spent in Canada by 2030. Canadians were moving towards the cashless transactions to make quicker and convenient payment. In Canada, about 70% of transactions were made through electronic cards or mobile apps which made Canada to become a full-fledged cashless society within a few years.

Conclusion     

Moving towards the cashless environment will provide more beneficiaries to the people in means of convenience, safety, lower risk, etc. The major reason behind the demonetization was to demolish the flow of black money and the fake notes which affect the economic growth of a nation. This reduces the time to stand in a queue at a bank or ATM to withdraw cash and it will be safer while travelling and will be very helpful during an emergency.

Author is CEO and Co-Founder of Zoplay , best PHP scripts Development Company located in India. Zoplay is a part of Casperon Technologies a leading social and mobile development company which developed a Zoplay Scripts.



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