Payments have consumed the better part of the previous 15 years of my life. During that time, I’ve seen some massive shifts in some societies’ payment behaviour… and frustratingly little change in other regions.
If it took 1000s of years for humans to move from coins to banknotes to bank cards, you’d think I’d be prepared to be patient when it comes to a global digital payments revolution. But when you know better, you do better, right? We know better. There’s no good excuse for why many regions are still hanging onto their reliance on cash. I believe that the current coronavirus pandemic will provide a big push towards more societies getting rid of cash for good.
Sure, there are many reasons why cash is a current necessity for individuals in societies without well-developed welfare systems, laws around living wages, robust electronic tax and reporting systems (etc.). The digitalisation of cash goes a long way toward helping to solve many of these societal problems. Surely then, a huge priority for cash-reliant nations is moving toward electronic – reporting, identification and money. The people within those societies who most benefit from traceless cash the most aren’t going to accept Government mandated digitalisation overnight, though.
Our world is currently crippled by the – only very initial – devastating consequences of the coronavirus pandemic. It is far too early to make judgements on which nations have handled the epidemic “the best”. At the conclusion of all of this, depending on where interests lie, there’ll be a thousand different opinions about which countries dealt best with the crisis anyway. I’d argue that the countries with well-developed e-systems in place were and are better equipped to tackle the consequences and fall out from this disaster. For example, in Sweden and Norway, a centralised electronic ID system makes it easy to track and report diagnosed cases of coronavirus. This means that from the outset, accurate tallies of those affected have been reported – unlike in regions like the UK, where it’s still unknown what the true number of coronavirus cases is. That’s not to say that Norway and/or Sweden are to be used as best-case examples of how their respective governments have handled the situation… it’s just to say that they’re better placed to do so as opposed to a region with no electronic ID or robust e-systems.
I think that when we look back at this time retrospectively, we’ll recognise that it’s a pity we didn’t get to the point of being cashless – or more specifically, to make payments without physical proximity (or near enough) in more societies prior to this.
It’s too early for any formal analysis but I wonder if the regions most heavily reliant on cash are those who will find it hardest to “bounce back” from an economic standpoint. As restrictions lift and people start to venture out for takeaway coffees, food and their contactless retail fix, those businesses who can offer ways to pre-order and pay without any physical proximity are at a distinct advantage.
The crisis has already sparked a lot of conversations about the benefits of a cashless society. China, already one of the largest users of mobile payments, is well on the way to becoming the first cashless society in the world according to some reports.
I truly hope that it’ll exacerbate and drive governments forward in their implementation of electronic systems. God forbid we experience another epidemic like this (or worse) in our lifetimes. But, if we do and for a host of other reasons it would be bananas to go back to the status quo post-pandemic.
There are a number of initiatives governments, banks, retailers and investors can take right now in order to help economies recover faster and stronger in a future crisis. With reference to payments, the onus should be on providing incentives and support to businesses and the public in order to establish systems that allow easy ordering and payments without any physical proximity. Further, steps should be taken to help people to use these systems – especially the vulnerable. In Sweden, the dominant mobile payments solution, Swish, has seen a 50% uptake in use by pensioners during the current pandemic.
The benefits of implementing a mobile payments solution for the masses won’t just be felt in times of trouble, either. This piece from a couple of years ago outlines some of the many benefits of a true mobile payments system. These benefits just touch upon the personal benefits that people – both members of the public and business owners – experience with a ubiquitous mobile payments solution and accompanying e-identification and reporting. The benefits for governments and the larger society include a better control of the shadow economy, less tax fraud, an increased ability to quickly interpret and apply the findings of data and so on.
For the governments and powers that be within cash-heavy societies, I have a challenge beginning right now: either get the ball rolling or defend the move not to start improving and implementing e-systems – particularly non-physical proximity mobile payments systems.