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Cash is dead, long live digital cash!?

In my previous blog, Cash is king, but for how long?, I discussed the global cashless trend. In a nutshell, recent studies show that consumers are using payment cards more often, for all sorts of purchases. At the same time, in Britain, cash machines were disappearing and along with them, people’s access to cash.

Today, five countries are home to more than fifty per cent of the world’s cash machines. Four of these countries, Brazil, China, Japan and the USA all saw a decline in the past year. While it’s true that all around the world, populations are replacing their cash for cards and access to cash is becoming harder, there’s still a caveat to this trend.


Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light;
-Dylan Thomas – 1914-1953


Will cash go gentle into that good night?

A new RBR study, Global ATM Market and Forecasts to 2024, shows that the number of cash machines around the world fell by 1% (roughly 700,000) in the last year. However, in developing economies and those in transition throughout the Asia-Pacific, Middle East and Latin America, cash machines are actually on the rise. India saw very slow growth in the number of cash machines, but growth nonetheless.

As the decline of cash machines in developed markets continues, so will the growth of cash machines in developing markets. Will this growth continue unabated? No, it will not. Still, in the coming years, this offset will lead to a rather slow decline in cash machines, from 3.24 million in 2018 to 3.22 million in 2024. The impending cash extinction will one day be upon us, but it won’t happen everywhere all at once.

 

 

When the time comes, will cash be missed? Perhaps, for a little while. But going cashless has its benefits. To name a few:

Safety – Cash is dangerous

Safety has always been a concern when it comes to cold hard cash. For many businesses, the less cash on the premises, the better. Especially as contactless payments become the norm, the less time spent on the handling and changing of money will result in faster service and shorter waiting lines for consumers.

Health – Cash is dirty

It’s also a matter of maintaining good hygiene. Did you know flu viruses can live on paper money for up to 17 days? At the London Met, an investigation into the hygiene of money found that cash in circulation contained life-threatening superbugs like MRSA as well as bacteria like Listeria. This is especially a problem for people with weak or weakened immune systems.

Scale – Cards are less messy

Major cities are also taking note. Here in the Netherlands, try paying a bus driver in cash, and she’ll just turn you away. In cities like Rotterdam, the entire public transport system is card-based. Same goes for London, where the Oyster card is your gateway to all transit options. As we speak, the city of Paris is about to launch a card-based payment method for its metro system. Passengers with a Navigo Easy card will be able to recharge their credit with their smartphones, further separating the virtual from the physical world.

Data – Cards are insightful

One of the aspects that few people think about is that card payments are easier to track. Measurements and financial reporting are more accurate when people use cards. Cards tell us a lot more than money spent. Cards tell us who spent it, where and when. Cards allow for predictive analytics that ideally improve the experiences of consumers.

Still, fraud is not going away

Technically, a card is only as valuable as the amount of cash it represents. However, the ‘danger’ of handling cash is also moving into the digital era. As the speed and overall value of transactions increase, so does the speed at which fraudsters operate.

Instead of looking over their shoulders, customers now rely upon you, the business owner or manager, to make sure their transactions are protected in the online environment. So of course, this naturally begs the question: what’s the digital and legal equivalent of a sawed-off shotgun hidden under the counter?

Well, you’d need a system. Ideally, a payment system with a 100% payment guarantee, that detects fraud but also prevents it from happening. A system with seamless integration and advanced business intelligence tools for invaluable insights that give you a competitive advantage.

I think I might know of such a system.

Get in touch with our team for more information on our payment services.

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Andrew Collins
New Business Development Manager

Latest articles

The future of prepaid top-up

Cash is dead, long live digital cash!?

In my previous blog, Cash is king, but for how long?, I discussed the global cashless trend. In a nutshell, recent studies show that consumers are using payment cards more often, for all sorts of purchases. At the same time, in Britain, cash machines were disappearing and along with them, people’s access to cash.

Today, five countries are home to more than fifty per cent of the world’s cash machines. Four of these countries, Brazil, China, Japan and the USA all saw a decline in the past year. While it’s true that all around the world, populations are replacing their cash for cards and access to cash is becoming harder, there’s still a caveat to this trend.


Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light;
-Dylan Thomas – 1914-1953


Will cash go gentle into that good night?

A new RBR study, Global ATM Market and Forecasts to 2024, shows that the number of cash machines around the world fell by 1% (roughly 700,000) in the last year. However, in developing economies and those in transition throughout the Asia-Pacific, Middle East and Latin America, cash machines are actually on the rise. India saw very slow growth in the number of cash machines, but growth nonetheless.

As the decline of cash machines in developed markets continues, so will the growth of cash machines in developing markets. Will this growth continue unabated? No, it will not. Still, in the coming years, this offset will lead to a rather slow decline in cash machines, from 3.24 million in 2018 to 3.22 million in 2024. The impending cash extinction will one day be upon us, but it won’t happen everywhere all at once.

 

 

When the time comes, will cash be missed? Perhaps, for a little while. But going cashless has its benefits. To name a few:

Safety – Cash is dangerous

Safety has always been a concern when it comes to cold hard cash. For many businesses, the less cash on the premises, the better. Especially as contactless payments become the norm, the less time spent on the handling and changing of money will result in faster service and shorter waiting lines for consumers.

Health – Cash is dirty

It’s also a matter of maintaining good hygiene. Did you know flu viruses can live on paper money for up to 17 days? At the London Met, an investigation into the hygiene of money found that cash in circulation contained life-threatening superbugs like MRSA as well as bacteria like Listeria. This is especially a problem for people with weak or weakened immune systems.

Scale – Cards are less messy

Major cities are also taking note. Here in the Netherlands, try paying a bus driver in cash, and she’ll just turn you away. In cities like Rotterdam, the entire public transport system is card-based. Same goes for London, where the Oyster card is your gateway to all transit options. As we speak, the city of Paris is about to launch a card-based payment method for its metro system. Passengers with a Navigo Easy card will be able to recharge their credit with their smartphones, further separating the virtual from the physical world.

Data – Cards are insightful

One of the aspects that few people think about is that card payments are easier to track. Measurements and financial reporting are more accurate when people use cards. Cards tell us a lot more than money spent. Cards tell us who spent it, where and when. Cards allow for predictive analytics that ideally improve the experiences of consumers.

Still, fraud is not going away

Technically, a card is only as valuable as the amount of cash it represents. However, the ‘danger’ of handling cash is also moving into the digital era. As the speed and overall value of transactions increase, so does the speed at which fraudsters operate.

Instead of looking over their shoulders, customers now rely upon you, the business owner or manager, to make sure their transactions are protected in the online environment. So of course, this naturally begs the question: what’s the digital and legal equivalent of a sawed-off shotgun hidden under the counter?

Well, you’d need a system. Ideally, a payment system with a 100% payment guarantee, that detects fraud but also prevents it from happening. A system with seamless integration and advanced business intelligence tools for invaluable insights that give you a competitive advantage.

I think I might know of such a system.

Get in touch with our team for more information on our payment services.

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Andrew Collins
New Business Development Manager

Latest articles

The future of prepaid top-up

Cash is king but for how long? Alphacomm Solutions

Cash is king, but for how long?

The latest Global Payment Cards Data and Forecasts report by RBR, released in February 2019, highlights the sharp rise in the acceptance and usage of payment cards. But are merchants ready for a cashless economy?

In 2017, approximately $25.1 trillion worth of purchases were made with payment cards compared to 2016. In this same period, e-commerce card expenditure reached $4.5 trillion; an increase of 13%. According to the study, card expenditure worldwide is expected to be valued at $45.2 trillion by 2023. E-commerce will make up a substantial part of this figure as it is predicted to hit $11 trillion.

Low value payments are becoming more frequent

One explanation for the rise in card expenditure is consumers are increasingly using their cards for low value payments. In recent years, mainstream adoption of cards as methods of payment has been buoyed by improvements in convenience.

One notable exception to the trend is China. Chinese consumers generally reserve cards for high value purchases. Nonetheless, the Asia-Pacific region, with its 28% share in payment volume, is still responsible for 50% of global card expenditure.

Access to cash in a cashless economy?

Consumer attitude is changing when it comes to commerce. In Europe, many businesses and festivals have started to eliminate cash as a payment option. Another development in the payment landscape is the passing of the Payment Services Directive (PSD2) by the European Parliament. The directive provides a much-needed regulatory framework within which European banks and fintech companies can coexist and allows for greater access to alternative banking options.

However, these changes and shifting attitudes have left some wanting. As younger generations do most of their banking online, brick and mortar bank branches have been disappearing across Europe. According to analysis in the UK by Consumers’ Association Which?,  ATMs are disappearing at breakneck pace, especially in rural areas. In 2018, approximately 200 British communities either had poor or no access at all to cash machines. As access to cash becomes a problem, card expenditure will undoubtedly continue to rise. But are merchants ready for the cashless economy?

Securing revenue in the online world

The more we spend online, the more we need to be aware of the pitfalls. As the value of card transactions drops and the frequency of use rises, merchants will increasingly see the need to take measures to protect their business by securing their revenue. Avoiding costly chargebacks and outsmarting fraudsters are among the top challenges for online merchants.

Furthermore, as e-commerce spreads to new markets and international consumer purchases become more prevalent, the need for tools like as SEPA e-mandates and digital payment reminders will only rise. How are you preparing for the cashless economy?

Get in touch with our team for more information on our business solutions.

Alphacomm Solutions whitepaper: how automated payment reminder systems boost your credit management performance

Andrew Collins
New Business Development Manager

Latest articles

The future of prepaid top-up