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Why Cashless Society?

DIGITAL VENTURES X FAUNGLADA September 03, 2017 3:50 PM

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“In the future, there will be no bank notes, no coins, and no ATM.”

This is what is trending and also what the Thai government are driving with the National E-Payment policy. Some may think it is farfetched and would still prefer to use real bank notes. I have just returned from China and found that they have successfully implemented this policy. Every store from department stores to food stalls understands and accepts payments from mobile phones!

What is cashless?

Cashless is not using cash such as returning money to a friend via a mobile application without touching any cash.

Not only in China but several countries are gradually moving from a cash to e-payment society.

In Thailand, we begin to see bank applications that support different channels of payment such as the updated SCB Easy application with “Request to Pay”. The feature can collect money from friends by stating the amount together with the credit term. Afterward, your friend can easily pay to your e-wallet. Another feature is the QR Code payment wherein SCB has begun the “SCB Prompt Pay for Prompt Taxi & Delivery” service last year (QR code scanning in taxis and paying via the application). Today, there are more users and the project has expanded to collaborations with motorbike taxis and stores in the Jatujak market. We shall be seeing more QR codes in the future.

Is “cashless” a good idea?

“Cashless” isn’t just a cool idea but it helps solve problems.

In the past 20-30 years, banks bear the enormous cost of document management. Think about how much energy and resources are used to manage the ATM when...

  • We walk to the ATM to withdraw cash.

  • We walk to the store to pay.

  • The store gathers all the payments and deposits at the bank.

  • The bank takes the cash and placed them in the ATM.

  • Then, repeat from number 1.

With an electronic system, the process will be reduced to just the customer and the store.

Aside from saving management costs, switching to a cashless system also provides users with the convenience of an anywhere and anytime transaction. E-payment is the heart of a cashless society, with it, payment and consumption are easier. This stimulates the economy because people can pay and deal businesses without having to meet face to face. Moreover, transactions across provinces, regions, or countries will be easier and faster.

Another advantage of the cashless structure is systematic tracking. An organized monitoring process will help prevent corruption. Also, the government can accurately collect taxes and, in the long term, when corruption decrease and taxes are properly collected and transparently used, the country will surely have a higher potential for development.

What about the disadvantages?

Fees are the first factor that may prevent users from switching to the cashless system. Normally, e-payment systems have fees similar to the credit card system. When charges increase, the users will need to bear the costs.

Moreover, cashless means no privacy. Electronic transactions are always stored and if the information falls into the wrong hands then there may be consequences. More importantly, cashless can also involve issues regarding poor security and fraud.

Nevertheless, the cashless system is here and will gradually alter the way we use money. We need to adapt and be updated because there may come a day that actual cash can’t be used anywhere once every store has switched to the cashless system.