The days of paying for goods and services using cash are slowly, but surely, fading into the sunset.
Research has shown that the number of cash payments taken by Australian merchants dropped 46 percent between 2010 and 2016, and cash currently only makes up 10 percent of all transactions.
In recent years, the world has been introduced to innovations like tap-and-go card payments, payment chips embedded in devices like watches, and online payment platforms like PayPal. But the most groundbreaking of those platforms that businesses and consumers have been able to tap into have been Bitcoin and other blockchain-based digital currencies.
These new technologies don’t just offer greater convenience for shoppers, but improved levels of security and a raft of other benefits that will make the cashless world a better place for both business and customers.
How moving away from cash is trending in Australia, and worldwide
Cash is predicted to make up only 2 percent of all payments by 2022.
The Reserve Bank has already begun to roll out innovations designed for a cashless society, with the first being the New Payments Platform (NPP). This allows for near-instant transfers of money between accounts, even if they are with different banks.
More than 50 banks, credit unions, and building societies have signed up and employees already have access to the NPP, with mainstream rollout expected to happen soon.
The RBA has also released figures showing we are rapidly heading towards a cashless society, with ATM withdrawals dropping 7.7 percent from 2016 to 2017
Here are some other instances from around the world where countries are moving towards a cashless society:
- Canada leads the world in cashless transactions, with 57 percent of transactions made using alternative methods
- Sweden and Mexico have already rolled out real-time payment systems like the NPP.
- In 2016, India removed its highest denomination bills — removing 90 percent of paper money from circulation.
- The People’s Bank of China is looking into digital currencies and has acknowledged that physical cash may one day become obsolete.
Australian businesses are adapting to a cashless society
Variety Club is a charity organisation that was used to accepting cash donations from around the country. It has since moved to the use of mobile card facilities which CEO Janette Connolly said was a direct response to the decline in the use of cash.
In another area, Kensington Street is a popular shopping and eating precinct in Inner Sydney, which rolled out cashless payment options across its stores three years ago. Management even created a cashless card preloaded with funds for those that were reluctant to change, so they could use their own cash to purchase a non-cash way of paying.
Melbourne rewards-based mobile payment network Liven has been pioneering cashless payments since it was founded in 2014. The app, which allows users to receive 10–25% of their bill back as rewards currency LivenCash, has a user base in excess of 200,000 eating at over 1,000 venues across Sydney and Melbourne.
Deciding to dive even deeper into the world of cashless payments, Liven recently announced it would be converting its internal virtual currency into a cryptocurrency, tapping blockchain technology as the next frontier of lifestyle payments.
After its initial coin offering in June-July, Liven users will soon be able to use crypto to buy food and receive rewards at some of Australia’s most prominent restaurants, cafes, and bars.
The benefits of a cashless society
One of the greatest benefits of going cashless is increased security for both vendors and customers.
Cash has long been the target of opportunistic thieves and its removal has the potential to reduce crimes like robberies and muggings.
Cashless transactions also offer greater efficiencies, with tap-and-go and prepaid digital methods cutting down long lines where people pay with cash and wait for change.
Best of all, a cashless society would be a boon for the economy. Studies have shown that people will often forego small purchases if they do not have cash on them. But with myriad cashless options available, they would be more likely to make the purchase and spend more overall.
How blockchain technology can amplify those benefits
The entire end-to-end process of goods and services would become transparent under a blockchain model, because it offers complete traceability when tracking movement of goods, their origin and quantity.
This means benefits in relation to cost and quality, as any discrepancies or inefficiencies detected along the supply chain can be traced to the point of origin.
As every element is recorded through blockchain technology, human error in accounting also becomes a non-issue. It means more reliable, cost-efficient and quality supply of products at every link in the chain.
Finally, the ability for groups and businesses to create their own digital currencies and systems of finance through cryptocurrency and blockchain technology unlocks potential for cashless payments to move away from centralised banking systems, and for value to be placed back in the hands of consumers.
Find out how Liven is looking to achieve these goals through its world-first global currency for food here.
Read more about how The LivenPay project is building a stable cryptocurrency for the real world, and making the capabilities and benefits of blockchain technology accessible for brick and mortar businesses and everyday consumers in this announcement.