A Cashless society, the new reality
While the world debated the future of digital payments, a global pandemic appeared on the scene and changed the game dramatically.
The financial world has been adapting to the advancements in technology for the past two decades as consumers demanded faster, easier, and more secure ways to conduct their financial transactions. The world had become a global village -where everyone became busier but more connected than ever before- standing in queues, visiting ATMs, waiting for change, dedicating time to go shopping, and making the rounds to pay utility bills have all become a burden to our new fast-paced lives.
As ironic as it seems, the COVID-19 pandemic helped banks, financial institutions, and consumers shift from traditional cash payments to digital payments, like credit cards and mobile banking. Almost overnight, the world completely shifted online and at the heart of it was the financial aspect.
The transition from paying with cash to going cashless was accelerated because of public health concerns and people soon realized that it was more convenient and it simplified their day-to-day transactions.
You no longer have to exchange cash — and possibly germs — as going cashless helps minimise your concerns and in most cases, it helps you unfold a more transparent way to keeping track of your finances.
Is cashless the new reality?
As more consumers become more tech savvy, so will the rise of digital payments. But before we dive into how cashless may be the new reality, let’s take a look at a few scenarios.
You probably own a smartphone, may have a subscription to listen to music and watch movies and TV shows on demand, may have shopped online recently, transferred money through your mobile banking app, and possibly paid with either your debit or credit card at any point-of-sale locally or abroad.
If you relate to any of the above, then the future of digital payments and going cashless is not going to disappear. In fact, according to the European Central Bank, cashless payments in Europe increased by 8.1% to 98 billion in 2019 compared to the year before. In parallel, traditional cash infrastructure is declining as more consumers prefer digital payment methods and using their mobile banking app over visiting bank branches, ATMs, and paying in cash.
The MENA region’s reliance on digital payments is also no different. According to a report by Research and Markets, the digital payments market is expected to grow at an annual rate of 13.3% from 2021–2026. This is because more businesses and consumers are gradually adopting digital payments as a result of their benefits, convenience, and simplicity.
Think about it: almost everything you need is now online and more people than ever have become digital savvy shoppers who also view cash as merely a backup in their wallets. The stage is certainly set for a cashless society.
Cashless payment methods are the new reality
A cashless world has certainly become a necessity rather than an option — pretty soon even your backup cash will soon make its way from the wallet in your back pocket to your e-wallet. Other than being convenient, fast, and secure, cashless payments are dynamic, so you have quite a few options to choose from the next time you want to make a purchase.
Contactless cards
The cards that already represented the new cashless era now themselves have become an even more safer option to pay. A contactless card is your debit card or credit card equipped with technology that allows you to make a payment by tapping or waving your card over a point-of-sale (POS) machine.
This means you no longer have to hand over your card to any merchant, physically enter your PIN in front of anyone, and wait for your payment to be approved. You simply tap or wave your card and your purchase will be complete in as little as 2 seconds.
Contactless cards are already largely used and according to a global consumer study by Mastercard, around 52% of respondents across the world say they have swapped their regular cards and cash to contactless cards because of their safety, convenience, and quick transactions.
With contactless cards, your card is for your eyes only and in addition to that, you no longer have to awkwardly hold up a queue or wait in a queue for a long time.
Don’t forget you can now visit any Bank al Etihad branch and replace any of your cards with a new contactless card for free.
Digital wallets
A digital wallet, also known as an e-wallet allows you to pay with your smartphone. In fact, it works the same way as a contactless card, so you can forget about rummaging for your card the next time you want to pay for something or better yet, leave your card at home- just as you can tap or wave your contactless card over a card reader, you can do the same through your smartphone.
How does a digital wallet work anyway? You simply store and link your card details in a wallet app (some examples include Apple Pay, Google Pay, and Samsung Pay) or your mobile banking app and you’re ready to use it and pay on the go or online.
This contactless payment method uses near-field communication (NFC) or radio frequency identification (RFID) technology. This allows you to make a purchase safely, securely, and quickly. Paying through digital wallets may not be available in Jordan just yet, but we’re pretty sure it’s on the horizon!
Biometric payments
A bank’s goal is to always ensure that your money and personal information is safe and secure 24/7, so in the future, we may see biometric payments rolling out. Today’s credit cards and debit cards come with a PIN code and password to protect your account. However, many people resort to using the same password for multiple accounts which puts their money at risk.
With biometric payments, your cards will need your fingerprint, iris scan, or facial recognition to approve a payment. This way, even in the unfortunate case that you lose your card, your information cannot be stolen as only your biometric data is the key to moving, transferring, and paying funds.
As we look into the future, you’ll benefit with seamless and instant payments, an added layer of privacy, and faster and more convenient transactions.
QR code payment
The QR code is another digital payment method that is convenient with today’s times of social distancing. While we’re now accustomed to scanning QR codes on billboards and restaurant menus, they’re making their way to versatile payment methods.
QR code payments aren’t fully adopted yet, but they work by using your smartphone. You simply scan your show your vendor’s your QR code and the payment will automatically process.they’ll scan it for you. You’ll then receive a notification that your payment is approved.
In the not so distant future, we could see cashless and digital payments taking off and becoming the norm. One thing is for certain, consumers and businesses no longer only rely on physical cash and pretty soon that’ll be a thing of the past. We’ll also expect many new payment methods to appear and play a vital role in shaping our future with money and finance. Only time will tell what digital payment methods people would prefer to use. But, until then, it’s clear that a cashless society is the new reality.
