The Cashless economy: the future is ahead
Undoubtedly, the pandemic has brought about great changes to the way we see banking, as people seek to reduce the use of cash when making payments for services and products, which is why the acceleration of the adoption of Cashless payment methods had a huge boost in recent months. Well, due to the importance of understanding how cashless payment methods work and their role in the Mexican market, the second webinar organized by Prosa that had the participation of Vanessa Hyslop, CEO of Global Payments Technology in Mexico, Jorge del Castillo, Senior Principal Business Consultant at FICO and Blas Caraballo, Vice President of Digital Payments and Financial Services at Walmart de México evoked an understanding of how the pandemic drove the adoption of this technology.
Of course, Mexico has a great tendency to use cash within its inhabitants, and is that, according to studies carried out in 2018 by the Central Bank, 90% of Mexicans continue to make cash payments. However, many efforts have been made to change this situation; according to Jorge del Castillo, in the last 3 years the number of point of sale terminals (POS) in the country has increased by 17%, which translates into a greater and better banking infrastructure. In addition, there are two POS terminals for every 100 working Mexicans who are active, so they currently have sufficient infrastructure.
For his part, Blas Caraballo comments that, although infrastructure is very important to advance to a cashless economy, the will of adoption by users is even more so. In the past, many people were reluctant to make electronic payments for fear of theft of their data or little understanding of the operation of these systems, however, adoption trends have accelerated significantly due to the pandemic, and according to Caraballo, , “In two or three months, we will advance almost what we plan to advance in 5 years or more.”
Well, despite the fact that the will to adopt by users has increased, it is a reality that only 47% of adult Mexicans have a bank account, according to a study by the CNBV in 2018. For this reason, for achieve true financial inclusion, and in this case also digital, Vanessa Hyslop suggests that the bank registration process be completely digital, that is, eliminate the autograph signature requirement, however, to achieve this, the creation of a unique digital identity will be necessary . Hyslop comments that, despite sounding utopian, in India there is an example where 1.5 million people are already registered. This project made the affiliation process cheaper, avoided duplication of identifications, and also empowered the residents of that country to be able to identify themselves wherever they want and through any channel.
In the same way that the cashless economy provides many benefits to users such as effectiveness, efficiency, safety and, today more important than ever, hygiene; In the perception of users, there is still the idea that making an electronic payment can be very insecure. In addition, according to Jorge del Castillo, the pandemic has left fraudsters a very smooth path since this number of electronic transactions has never been seen, however, what must be done is to counter fraud with more technology, that is, always be one step ahead of the criminals. It requires that, through automatic learning algorithms that identify the customs, typing styles and more characteristics of the users and that the transactions are always carried out through the same mobile device, it will be 98% more reliable to protect the identity of the people in order to avoid bank fraud.
Nowadays, businesses understand that it is necessary to have digital platforms and implement payment services beyond cash, and that the benefits are clear. Vanessa Hyslop commented in this regard that, according to a study by the AMVO (Mexican Association of Online Sales) 6 out of 10 SMEs sell online today, allowing them to have access to more regional and, in some cases, clients. , international. Consequently, businesses must be educated to understand which is the best channel depending on the sector they are engaged in as well as regarding the technology that works best for them.
Well, without a doubt, the Coronavirus pandemic has accelerated digital inclusion in many ways. The technology, developed before the virus has come to find a deep acceleration and adoption by those insecure to do so, has helped eliminate cash and promoted new payment methods, however, the true adoption of the cashless economy will only occur completely at the moment in which the user feels safe making his electronic payments.
