Do you think it's good for society to go totally cashless? (no more physical currency)
-Kuriko
A couple of posts back, regular reader raised the above topic as a potential post.
For me, I don't really think whether it's good or not, but rather, I think it's interesting to talk about it.
A cashless society.
Also, there's a lot of confusion? Misunderstanding? on what is considered cashless.
Card payment methods, such as credit cards, NETS, were already cashless a long time ago.
Although the "in" thing now is mobile payments.
So Singapore was already going cashless sometime back when most of our shops accepted card payments.
Did we go significantly further when we started introducing mobile payments in our repertoire?
From what I see/saw before I left SG or when I returned to SG, there wasn't much difference.
Most shops which previously accepted card payments, still accepted card payments. Not many accepted mobile payments.
Yes, there are some new retailers which have accepted mobile payments.
Hawker centers still accept cash with a few accepting mobile payments.
One big change I noticed sometime back, was that in NUS, all the canteen stores accept mobile payments.
Now, it seems like all the rage these days.
Cashless payments, card or mobile.
For me, I don't think of it as good or bad, rather, I ask "Why?".
For me, using card payments was for my own benefit.
Card rebates, promotions, discounts, 1 for 1 offers, don't need to handle cash/coins.
I enjoyed these benefits when I started using credit cards, and still do.
For me, there were no reasons to move to mobile payments, as there was no benefit to be gained.
There might be one reason I would move to mobile payments, which is to pay for hawker food, cos I don't like getting back greasy change. Which is typical when buying prata.
So, I wonder "Why don't more people move towards card payments?", since there is benefit to use it?
Then comes all the issues with credit cards and discipline in spending, debt, and stuff like that.
Then next comes... "OK, then why not debit cards?"
What's the big deal with mobile payments?
I started out by using debit cards.
Carrying one less card is only marginally better vs having it all on the phone.
Whereas having payments on a phone, I have to maintain another "account" top up that account, stuff like that.
Personally, I see very little use as a consumer to move towards mobile payments...
Except in NUS, where there are discounts when using mobile payments to pay for canteen stuff.
BUT... as a retailer, there are reasons to move cashless or NOT to move cashless.
If I'm an individual biz owner. I'm always at the shop, then I'll likely like cash. There are "tax benefits", in cash. I might accept card or mobile payments as it's more convenient or for big ticket items. But cash would be preferred.
Cashless payments are useful for businesses which employ staff, cos well... cash... there's always the issue of missing money. So for a business to pay a couple of percentage admin fees, it's a small price to pay to prevent other losses.
Mobile payments might be more cost effective for businesses cos all they need is a QR code, they don't need complex devices like a card reader, etc.
There are 2 major countries/economies which still do not embrace cashless payments.
Japan and Germany.
When I was in Germany, there was an ATM at the back of the beer house for me to draw money so that I could pay cash.
In Japan, cards are accepted, but apparently many Japanese still use cash.
When reading online, the most common reason why this is the case, is pretty much "They like to know how much they spend, and spend less when using cash".
When I was in France, credit cards weren't normal. They used debit cards. Even the market vendor accepted cards. They have the wireless card readers for processing.
Even in America, when I queue for groceries, there are a few lines which are specifically "card payments" only. Which indicate that many Americans still use cash.
As much as many of us have moved out of cash, there's also the other question.
Why have so many people embraced mobile/ cashless payments so readily?
Now, of course, if there's a benefit, then it makes sense.
That's how marketers work as well.
There are real benefits for using credit cards, but also negative impacts as well.
If there's an incentive, then it makes sense for people to start or keep using it.
If retailers start using cashless methods so as to mitigate losses due to pilferage, then they might want to also encourage consumers to pay via cashless methods via promotions.
With sufficient incentive, consumers will tend to want to shift towards cashless payment methods.
So maybe for some countries, maybe Japan/Germany, they have honest people, honest staff, retailers don't feel that it's necessary to switch to cashless payment methods so they don't incentivize customers to pay cashless.
But until now, I've not seen much positive benefits for mobile payments, at least in SG.
Maybe in China there's more benefits, I'm not sure, but I heard WeChatPay is significantly more convenient as it integrates into their lives, example, you can order food at a restaurant via WeChat, then split the bill with friends and pay via WeChat, all on one app.
So, it may make a lot of sense going mobile when in China.
Our parents, also don't frequently use card payments.
Simply cos, they don't feel the need to.
They don't trust the cards, and they are concerned about fraud.
To them, there isn't much benefits and the rebates aren't enough incentive to change.
My dad still writes cheques to pay for most bills.
Of course the last big problem is that all these cashless payment methods require electricity or battery power.
A card payment would require electricity for the card reader.
And mobile payments require battery for your phone and probably the recipients phone as well, so that they can check their account.
Apparently, in Japan, during the Tohoku earthquake in 2011, credit cards were not usable due to power outages.
Here's an interesting article https://blog.btrax.com/mobile-payment-in-japan/
It talks about cash and cashless in Japan.
Also, it talked about how PayPay, a payment app, incentivized users to download and use it's app.
In truth, I don't think cash, cashless, card, mobile payments changes anything.
It allows Governments to track fund movements. However, from a societal point of view, I think it doesn't make much difference as cashless has already been around for years.
Cashless payments, statistically, encourage people to spend more though, cos people don't relate money with physical cash, it's just a number online.
If someone just uses cash, and they don't carry enough cash to buy that pair of shoes, there's no way to get that pair of shoes. So they just leave the shop.
However, with cashless, they can always have alternative ways to pay for that pair of shoes. They always have a bank account linked to their mobile app, or card which allows them to pay for it immediately.
This hasn't changed recently, cos credit cards already allowed this decades back.
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