As we step into the digital era, it is hard to deny that cash will reduce its importance in the future and will be replaced by technology for financial transactions that will support the expanding society and economy. Several countries, including Thailand, are beginning to shift from a cash society to E-Payment systems for daily lives payments. Today, a technology called ‘Contactless Payment’ is commonly used for more convenient and speedy payments. Let us have a look at how this technology can drive the Cashless Society and solve existing financial problems.
Getting to know Contactless Payment
Contactless Payment is a payment system which uses the RFID or NFC technology wherein a wave or a touch on the reader is needed. This technology can come in a form of cards such as credit cards, debit cards or smart cards and even in some models of smartphones.
Contactless Payment has disrupted financial transactions by replacing cash due to its simplicity and convenience. Users in many countries are carrying less cash whereas, in Thailand, some credit card providers have begun testing this system.
UK case study: A cashless society driven by Contactless Payment
Since 2007, UK is among the early adopters of Contactless Payment. Also, we can observe a leaping uptrend every year from the graph below.
A research on Contactless Payment in the UK shows that Contactless Payment is mostly used in grocery stores followed by restaurants. The age group who are driving this change are the millennials. They are increasingly using Contactless Payment due to the convenience and the nature of the system that fits their lifestyles.
In 2017, the sector that has the highest number of Contactless Payment usage is the fashion industry with a 321% increase or an increase 3-folds y-o-y. This is followed by the parking service with an increase of 137% wherein it enhanced the capability of the service and succeeded by department stores, supermarkets, and gift shops.
Not only does this benefit users, Contactless Payment also helps to directly boost sales for the stores. 1 in 3 stores that introduce the use of Contactless Payment has a 30% higher sales revenue per day when compared with normal stores.
However, despite the increasing support for Contactless Payment, UK still limits payment to only 30 GBP per time. Stores are trying to push for an increase in the limit to 50 GBP to support users who are willing to pay a larger amount.
In terms of growth, Barclaycard asked UK users and found that 6 in 10 UK users are willing to use Contactless Payment if the stores provide it. Moreover, it is estimated that the Touch and Go system will increase 3-folds by 2021.
The next step of donations, simplicity with just a “touch”
Another application is the use of Contactless Payment for donations to help different projects in the UK. This derived from the problem of cash-only donations, thus, limiting the areas where donations can be made. This resulted in the decrease of donations of up to 80 million GBP in 2017. This may be due to the fact that 40% of UK residents accept that they carry less cash during the past 3 years.
The need for Contactless Payment resulted in a startup that can help with donations for people in need and for other projects. Goodbox is a startup that can enhance the donation system with the use of Contactless Payment so that more people can participate. It is a hardware that works by waving credit or debit cards with RFID chips to make a donation. This startup has already been registered with a license.
With the highly-efficient donation management system in the UK, those receiving the donation can use the money via a card to access basic public utilities such as food, bathing facilities, and shelter. This also extends to vocational training that will improve their quality of life in the long term. This system has already made donors more willing to donate, more importantly, it seeks to enhance the donation system.
From its capabilities, organizations in several countries are interested in the Goodbox. This includes 180 charity organizations, 40 museums, 15 hospitals and several more banks. The Goodbox estimates that the Contactless Payment will help increase the total donation up to 24%.
It is apparent that the Cashless Society is moving closer to us. It begins by making daily lives more convenience and improving the donation system. Surely, Contactless Payment is another significant tool that will bring about a truly cashless society.
For more information about Cashless Society, read more at Europe Case Studies on Cashless Society and Cashless Society in Asia and Each Countries’ Measures.