Despite claims of physical currency becoming obsolete, cash continues to maintain its importance. It plays a vital role in many daily lives, and its absence would have noticeable effects on worldwide stability. Today, we delve into why cash management solutions are not as threatened as they may initially appear.
The fact of the matter is only a select few industries would benefit from an entirely cashless society. And while such a world may initially seem idyllic, it would come with just as many, if not more, drawbacks.
The stats don’t lie. Explore recent findings on cashless living and discover the benefits of keeping currency around – streamlining handling by using improved cash management solutions.
What does a cashless society look like?
As the name implies, a completely cashless society is one where notes and coins are no longer used for transactions. Instead, cash management solutions cater solely to facilitating and optimising digital payment options, including EFTs, debit and credit cards.
Yet despite preconceived notions, a cashless society isn’t a perfect society. As you’ll see below, besides finding solutions to new logistical challenges, plenty of social implications also need to be considered before saying goodbye to cash entirely.
Fun Fact: Although some prominent countries like Norway are moving closer to a cashless existence, the opposite is true for others. In fact, some countries have seen a resurgence in cash use. A recent Credit Karma study found that 53% of the 3 171 American adults surveyed stated that they use more notes and coins now than they did one year ago. Approximately 3/5 of these cash users also reported that physical funds helped them save by spending less.
1. Cash Acts as a Value Store
During trying times – think the Covid-19 pandemic – we tend to see a sharp increase in people withdrawing physical money, despite a drop in transactional use, due to its value store. That’s because human nature compels us to seek liquidity (i.e., tangible assets) during these times: the money paradox.
In 2020, the US saw the value of their banknotes in circulation grow by 16%, with corresponding figures for the same period in Mexico and the Eurozone coming in at 30% and 11%, respectively.
Although the pandemic is over, the world has become no less uncertain. Events like the looming global recession and the ongoing war in Ukraine prove this. Recent challenges might have caused select countries to move away from notes and coins, but the global value of funds in circulation still grows at a rate of 5-8% annually.
2. Money Protects and Serves the Vulnerable
Individuals who work irregular hours, gig-economy workers, the elderly, the unbanked or underbanked may all fall through the cracks of a cashless society. Consider this: in a society where smartphone transactions are the norm, people who can’t afford or use them properly will be at a significant disadvantage.
3. Tech Outages May Limit Digital Cash Assess
They might be positioned as such, but digital payment methods are by no means failproof. Network outages, system glitches, and human errors may all lead to timely issues. In a cashless society, this could potentially leave millions without access to their funds. Even if only temporary, it can cause great distress and lead to further problems for the affected individuals.
4. Digital Transactions Run a Hacking Risk
Payments purely made via digital means are no less susceptible to crime. Where muggers and robbers can pilfer physical cash management solutions, hackers assume this role when dealing with virtual solutions.
Should you fall victim to a hacker bleeding your account dry, you might not have alternative means to make or receive money. Yes, the law should step in and help, but restoring your financial position could take quite some time, leaving you temporarily penniless.
5. A Rise in Overspending
With physical funds comes an elevated sense of responsibility. Think about it: handing over currency makes you more aware of the financial impact a purchase has on your overall finances. On the other hand, electronic payments, done with a mere click, tap, or swipe, are so effortless the less financially inclined among us can easily overlook how much we’re spending.
6. You Can Track Physical Funds Along Their End-To-End Cycle
Contrary to what some believe, it’s indeed possible to follow notes and coins along their journey: from your business until it safely reaches your bank account. Cash management solutions such as our Connector software as a service (SaaS) tools enable this. The world-class financial transaction platform allows you to remotely (and in real-time) monitor and manage income, completing the circle of using and banking cash.
The Up-And-Coming Adult Populace Prefers Cash
According to Cash Matters, a civil society movement, one survey conducted in late 2020 across ten countries with 14 500 Gen Z individuals aged 16 and above revealed that cash is their preferred payment method.
This preference is especially surprising, considering their status as a self-proclaimed ‘almost always online’ generation. However, Gen Z’s aversion to debt and credit card usage helps explain the phenomenon.
Furthermore, the survey found that Gen Z values material possessions over experiences and prioritises quality over cost. With a global population of 2,5 billion, they are the first generation to have grown up without experiencing life before the internet. Their second and third payment preferences are mobile wallets and debit cards, respectively. In comparison, Baby Boomers prefer credit card payments, followed by debit cards, and only then cash.
Currency Isn’t Going Anywhere – Embrace Cash Management Solutions Instead
Judging by all these findings, cash will remain king for the foreseeable future, and so will class-leading cash management solutions. After all, you want to enhance business operations in any way you can, while catering to your clients’ needs and preferences.
Enter Deposita’s Protector range. These cash deposit machines will help you do more with what’s yours by streamlining financial admin processes, such as tallying and securing money. Ultimately, it will save you time and money by preventing human error, reducing overheads, and keeping funds as safe as money in the bank.
Explore Cash Management Solutions With Deposita
If a cash deposit machine isn’t quite what you had in mind, never fear: we have several product ranges for you to consider that are suitable for a variety of sectors. From state-of-the-art Exchangor cash recyclers to Digitisor SmartPOS devices and beyond.
Contact us today for a free consultation, and we’ll help you identify the best possible solution for your business’s unique cash-handling challenges.