Around the world, central banks are looking to replace cash services and escalate their country’s transition towards cashless transactions. The varied drivers for doing so include inhibiting money laundering activities, choking off terrorist funding and eliminating tax evasion.
Meanwhile, for countries across the world, promoting the move to a cashless society represents an opportunity to extend financial inclusion to under-served populations. And not just in the developing world - unbanked numbers in the United States and Europe are well into the hundreds of millions.
But there are other reasons for incentivising cashless transactions. Processing cash and supporting extensive ATM networks is a high cost business for banks. And the greater transparency and efficiencies made possible by electronic payment platforms represent a significant benefit to both banks and merchants.
While the volume and value of card payments is increasing, and consumers are rapidly adopting convenient contactless payment options like ‘tap-and-go’, the success of cashless policies remains heavily dependent on consumer acceptance of cashless mechanisms.
So, while contactless technology has quickly become the cashless payment instrument of choice for consumers worldwide, enduring concerns about the security and safety of using their mobile device as an alternative to cash transactions continues to impact widespread adoption of this mobile payment option.
Evaluating the progress being made towards a cashless future, this paper explores the approaches being implemented worldwide and the new technology innovations that are driving the growth of cashless payments around the globe.
It also maps the protections and policies that need to be in place to support and enable the three stage journey on the road to a cashless society: debit contactless payment cards; mobile contactless; and ultimately, the adoption of virtual currencies.