Do you accept…cash? Surprisingly, the answer to that question can vary today, especially for small businesses and companies with digital-only business models. While the majority of businesses still overwhelmingly accept cash payments, the increasing number of ‘non-cash’ payment options that are available to consumers and businesses around the world is changing the way we think about currency.
Now, it should come as no surprise that increased credit and debit card usage and new payment platforms like Square, Venmo, Apple Pay and Google Pay are reducing the use of cash. Cryptocurrencies like Bitcoin and Ethereum are also gaining in popularity with consumers using them as a safe and secure replacement for cash.
But, reports of the death of cash are greatly exaggerated.
According to a recent J.D. Power “Pulse” survey cited by TechRepublic, 78 percent of consumers believe shops and restaurants should continue to accept cash. The same survey also found that 82 percent of consumers carry cash, with a quarter of everyone polled generally keeping $50 or more in their wallet at any given time. Additionally, the survey found that when it comes to smaller purchases, 50 percent of those polled prefer cash to cards.
While cash looks like it’s here to stay for the moment, it’s prudent for executives and business leaders to stay abreast of the impact digital transformation is having on currency usage and consumer behaviors. Here at the APEX of Innovation, we uncovered a recent EY article on the digital economy that examines both the positives and negatives of a cashless world, including its impact on society as a whole.
The EY article points out that while the adoption of digital payment methods is increasing globally, the “pace and nature of [the] transition” are different depending on the location. For example, account-to-account payments are “proliferating” in Europe with Asia using blended payment apps with lifestyle features and the U.S. still widely using checks.
Regardless of where a country or region is on digital payment adoption, the EY article notes that the effects of digital payments stretch beyond business benefits and economic factors. In fact, usage—or lack thereof—can “raise questions around identity and inclusion,” according to the EY article. Solutions to help bridge the gap and increase digital payment access for all can help ensure that segments of society do not get left behind.
According to the EY piece, banks can join forces with regulators to help innovate payment systems and processes, making them more accessible for all. With more trustworthy systems, consumers are also more likely to adopt digital payments and leverage applications that can make the on-boarding process easier, including biometric authentication, a security process based on biological characteristics, that can help to overcome barriers to identity verification.
While we are probably a long way off from a cashless society, the benefits of digital payments are clear and adoption is on the rise around the world. In the end, according to EY, “the future digital economy must be safe and fair” in order for it to thrive.
For a closer look, read the complete EY article.