Digitalization is changing the way we handle money
Digitalization has changed many aspects of our daily lives. Payment processes are no exception. In recent years, the trend towards cashless payment methods has accelerated. Many people are wondering whether the end of cash has already been heralded?
The advantages of digital transactions are obvious: it's fast, convenient and secure. With a credit or debit card, we can pay in seconds without worrying about carrying cash, which always carries the risk of theft or loss.
Given these advantages, it is not surprising that more and more people are opting for cashless payments. In many countries, mobile payment methods such as "Apple Pay", "Google Wallet" and "Samsung Pay" are already just as established as our popular credit cards or online payment services such as "Paypal". Countries such as Denmark and Sweden already process more than 90% of all transactions cashlessly.
What does the increase in digital payment processes mean? It does not mean that cash will disappear completely overnight. In many countries, cash is still used, especially by older people or people who do not have a bank account. However, the trend towards cashless payment is continuing. More and more stores and restaurants are accepting cashless payments, although the trend in the hospitality sector has just reversed again, mainly due to the industry-specific disruption caused by the coronavirus crisis. In contrast, governments such as Denmark and Norway have announced that they will even stop printing banknotes and coins completely in the future.
Another factor is the growing importance of digital currencies such as Bitcoin or Ethereum. Although cryptocurrencies are still young and have not yet been widely accepted by society, they have the potential to become a popular alternative to traditional payment methods and currencies in the future. These "coins" are stored and transferred completely digitally via "wallets". Some crypto projects are particularly focused on simplifying payments, such as "Bitcoin Lightning" and "SegWit".
However, there are also concerns that a cashless system could have negative effects: Certain sections of the population would be completely excluded from payment transactions. Cashless payments could compromise privacy (keyword: transparent consumer), as every transaction can be recorded, tracked and even denied.
All in all, it remains uncertain whether or not cash will ultimately survive and what impact this will have. What is certain is that digitalization is already changing the way we pay. Such payment methods will play an increasingly important role in our lives in the future.