For now, cash in its physical form, although not really king anymore, still has a purpose to serve the world as evident by the recent cash usage spikes and protests advocating its usage. — AZHAR MAHFOF/The Star (25/6/2020)
MALAYSIA, like many other countries, is fast moving towards becoming a cashless society. The country is expected to be completely cashless by 2030.
Of course, there are detractors, but will it happen?
The West has seen many protests recently demonstrating dissatisfaction with citizens being forced to go cashless.
There was even a “Cash Out Day” in Australia recently with many Australians flocking to ATMs around the country to withdraw physical cash to protest against digital and contactless transactions.
The episode was also meant as a signal to lenders that cash remains an integral part of society and is always more reliable than electronic payments.
In the UK, the number of ATMs reportedly fell by 1,294 in 2022 with some 23,000 ATMs expected to shut down by 2030.
Interestingly, the number of people who used cash for their daily spending in the UK hit a four-year high in 2023, with some quarters saying it affirmed the importance of cash.
Some attributed the spike to the increasing cost of living as cash tends to help individuals control spending better than if they are just tapping cards and phones to make payments.
A 2024 survey by Visa notes that technology is changing how people pay for goods and services and there is a need to ensure good mobile connectivity, ubiquitous and seamless consumer experiences as well as inter-operability in order for more consumers to use electronic payments in their daily lives.
But the question is — does good connectivity mean that electronic payments will always be feasible, in every situation and at any time of the day?
Cashless societies
Just recently, the world experienced a global IT outage which caused havoc in many business operations, including electronic payment systems.
Additionally, the older generation tends to be averse to digital or electronic modes of payment, probably out of fear and lifelong habits of using just physical cash.
Also, it is much easier for banks and companies and even the government to track one’s spending habits and obtain, personal data when it come to cashless transactions, suggesting a compromise in one’s privacy.
The simple solution to all these issues is to have systems which accept both cash and contactless, digital payments.
According to some observers, however, purely cashless societies may be all we have in the future. If numbers are anything to go by, that’s what the future looks like.
Visa says increased connectivity, coupled with the wider payment methods and form factors, have transformed consumers’ experience in commerce.
“These technologies have enabled consumers to perform device-initiated payments anywhere at any time with their smartphones, and are fast becoming the norm as a more seamless, reliable and secure mode of payment.”
It says South-East Asia is making “remarkable strides” toward a cashless society.
“As consumers become more digitally savvy, they are also more open to using alternative methods of transacting with their peers. Almost three-quarters (73%) of respondents in South-East Asia are aware of peer-to-peer (P2P) payment methods, a spike compared to 67% in 2016.
“Across the region, respondents in Thailand (86%), Philippines (81%) and Singapore (75%) have relatively higher levels of awareness of P2P services.”
It also notes that the flexible and low-cost nature of QR-based payments has helped drive adoption for this solution in the region. And the adoption of this method is only set to grow further.
As one observer says, “Perhaps what we are doing is going back to the past where the barter system was once used and no physical cash was involved....” It’s not quite the same but true to a certain extent.
For now, cash in its physical form, although not really king anymore — still has a purpose to serve the world as evident by the recent cash usage spikes and protests advocating its usage.
This article first appeared in Star Biz7 weekly edition.
