Is The World Moving towards a Cashless Society?

Fun Fact: The earliest origins of money can be traced as far back as 9000BC, where grains were generally used as a form of money for exchange of goods.  Later came gold coins, then copper coins and now, here we are at paper notes.  The one notable change that can be seen here is the fact that the tangibility of money is slowly decreasing over the years.

Hear me out; the first official modes of currency were coins made of precious metals. This went on for some centuries, when suddenly, it was shifted to lesser materials like copper or bronze and even silver.  Then, in a sort of a new age revolution, paper currency notes were brought into use by the Europeans in the 17^th century (Another Fun Fact: The Chinese were the actual inventors of paper currency and were using it for more than 500 years before the Europeans).

 

The ancient form of money- copper and bronze coins

So, it’s been another 400 years or so, since paper currency is being used as a prominent method of exchange of goods (read: transaction). But, if you look closely at the trend in the market, the signs of its demise are pretty evident. As we rapidly move into a digital society, paper currency is bound to die.

Money was first truly digitized with the introduction of credit cards in America in the 1970s. Before that, a stable financial credit system run by a third party (in this case a bank), which was accepted by most of the merchants did not exist. And thus emerged, Visa and Master Card and other players of digital money.

Various plastic money vendors

Like every new innovation, it took its time to become popular, but now, here we are, using cashless money with great ease in our daily lives. So much so, that without our realization, paper currency is slowly dying. With the Reserve Bank looking to standardize plastic currency after a short trial in a few states, it seems the end is near.

But, India and even many developed countries have a long way to go towards the path of a cashless world. In fact, Sweden has come out as the country that is the closest to a cashless society. On an average, every single person in Sweden makes almost 260 transactions using their credit and debit cards per year.

An army of credit and debit cards are on offer from almost every bank

The reason behind this shift in mode of ‘preferable’ form of currency is the strong force by which technology is shaping and evolving our world. Cashless transactions are not only more flexible, but, surprisingly, more secure too. Unified shopping markets like supermarkets and hypermarts are only fueling this process.  Almost anywhere you go, you’ll find a card machine just waiting for your card to get swiped. And even the financial market is promoting their use, for the simple fact that they are comparatively much easier to process and handle, than traditional currency.

Online transactions have further reduced the physical footprint of currency. The physical swiping of the card has also been nullified, with secure alpha-numerical passcodes being used to safeguard your transactions.

Apple Pay and Google Wallet

So, this is where the next big leap in money transactions comes into the picture. It’s a universal fact now that mobile technology is a powerful force and almost all digital traffic is currently hogged by it. So, the whole premise here is that over the past year Apple and Google introduced a new revolutionary way of making transactions (As if cashless online payments weren't revolutionary enough).

So, almost every decent smartphone in the market has an NFC (Near Field Communication) chip built into them today. But, for the average consumer, until now, it was just useless gimmick.  But, as it turns out, these mammoth of companies, do think ahead. So, they have developed a new method of wirelessly making transactions using your mobile phones; even the manual typing of passcodes has been slashed.

Wireless transaction through Apple Pay

The smartphone in your hand will smartly enough, store all your collection of plastic money (read: credit &debit cards) in a single, “secure” place on your phone. And with that, you can wirelessly make payments by just hovering your device just near the payment machine, with a single tap.

Wow! Right? Not exactly. What’s skeptical here is the fact that mobile technology (as wonderful as it is) is still flawed; and not too secure either, as evident from various hacking scandals that come up from time to time.  So, would you trust your mobile manufacturer with all your accumulated wealth? That is the biggest question that remains unanswered.

While these companies do promise complete privacy and many other complex innovations that are supposed to keep our transactions safe or in other words crime free. But, that can only be ascertained, when we actually see this technology in action.

We are still too early in the game and surely, THIS IS THE FUTURE.  But, the present? I really don’t think so.  But, this much is clear that we are hurtling towards a cashless society. The next time you go shopping or buy something, notice the change, and you’ll know what I mean.