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Cash is king. This quote is facing a serious threat as the world is marching towards becoming a cashless society. The recent trends suggest that digital money will soon replace physical cash. Many countries are making active efforts to remove cash in circulation, Sweden is its prime example.
In Sweden, Cash is no longer a king, that’s why it’s also known as the pioneer of the cashless society. In Sweden, buses haven’t taken cash for years. 900 out of Sweden’s 1600 bank branches don’t accept cash deposits.
The impact of cashless payments is not only limited to Sweden. The graph below shows an increase in cashless transactions over the years in different regions.
The upward trend clearly suggests that the world will soon become a cashless society. However, people have many questions in their mind like what exactly is a cashless society? What are the different types of cashless payments that drive the cashless society? And what are the major benefits of a cashless society?
In this article, we will answer all those questions in great detail. So, without a further ado, let’s begin.
Cashless society can be simply defined as an economic concept or state where all the financial transactions take place through transfer of digital information instead of physical banknotes or coins.
If we look into history then we’ll find that cashless societies existed since the time when human societies were in their nascent stage. Many exchange methods were prominent, namely the well-known barter system.
In today’s time too cashless payments are possible due to debit cards, credit cards, mobile wallet apps, point of sales (POS), mobile banking, internet banking, etc.
There are many different ways by which a user can make payments without cash. Let’s have a look at them one by one.
Banking cards
Banking cards like Debit and credit cards are one of the most used cashless payment methods across the world. Banking cards come with various benefits like secure payments, convenience, and many more.
One of the biggest advantages of banking cards is that it can also be used for making other types of digital payments. For example, a user can store his card information in the mobile wallets or digital payment apps to make cashless payment. Moreover, banking cards can be also used in online purchases, PoS machines, online transactions, etc.
There are many reputed names like MasterCard, Visa, and Rupay when it comes to banking cards.
USSD
Unstructured Supplementary Service Data (USSD) is a cashless payment option for those who don’t have a smartphone. The USP of this method is that the user can make payments without a smartphone device or internet facility.
In this method, the user must dial *99# to interact with an interactive voice menu via a mobile screen. However, to use this service, the customer must ensure that his mobile number is the same as that of the one linked with the bank account.
This service is pretty similar to the IMPS and it uses the MMID and MPIN with mobile number or account number with IFSC code for a successful transaction.
Mobile wallet apps
Mobile wallets applications are quickly gaining traction due to its fast, secure, and convenient payment methods. These are mobile applications which allow the user to send, receive, and store money.
A user can add or store money in his wallet by simply linking his bank account. Similarly, a user can also send money to his friends, relatives, or any other person by entering phone number, email ID, unique ID, or scanning QR code.
Moreover, a user can also make payments to merchants and pay various utility bills like water bill, electricity bill, mobile recharge, and many more directly from the mobile wallet app.
QR Codes
QR stands for Quick Response. It’s a two-dimensional code that has a pattern of black squares which are arranged on a square grid. QR codes are read by imaging devices such as smartphone cameras.
QR codes are widely used for making cashless payments in which a user just has to scan the QR code of the merchant service to complete the transaction.
Contactless payments
Contactless payment is a convenient and secure method which enables the users to purchase products by simply tapping a card near a point of sale terminal. The card can be simply a debit, credit, or smart card which is also known as the chip card that is based on NFC (near field communication) or RFID technology.
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