Global Cashless Society Growth Opportunities

Global Cashless Society Growth Opportunities

A cashless society or ecosystem can be defined as one where traditional paper or metal-based currencies are overpowered by digital or virtual payment solutions. The COVID-19 pandemic has affected our day-to-day lives as well as businesses, societies, and the overall global economy. To reverse the apprehensions instilled in people’s minds with regard to hygiene and safety and return to pre-pandemic stability, enterprises have realized the urgent need to move to digitalized payment modes.

While multiple digital payment platforms are available, cash continues to be the preferred mode of payment even in developed economies such as the United States and a major part of the United Kingdom. However, the pandemic has disrupted this trend, and digital payment platforms have gained momentum (even local businesses and retail stores are embracing this format).

This pandemic-induced change is tangible and is felt across all market segments; it has also triggered a paradigm shift in end-consumer perception. Traditional brick-and-mortar store operators are gradually moving to omnichannel modes of operation, eCommerce businesses are offering deferred payment options to their consumers, and private financial institutions are incorporating advanced technologies to attract customers to digital payment solutions.

The incorporation of advanced technologies such as NFCs, biometrics, blockchain, and AR/VR by all the major financial corporations in the digital payments space indicates end-consumers’ growing affinity for the cashless business ecosystem. While almost 50% of global transactions in 2030 will be done through eWallets, the global share of cash-based transactions will fall below 10%. The exponential growth of the eCommerce segment will act as a major trigger for this transition.

In addition, an economy driven by digitalized infrastructure allows government administrators to create a formalized and transparent ecosystem in terms of the flow of the economy (both domestically and internationally). A digital economy helps administrators trace the source of funds and eliminate financing for anti-national and antisocial activities.

This Frost & Sullivan study offers a comprehensive analysis of how digital payment solutions are likely to outweigh the traditional cash-based system in the post-pandemic era. The study's narrative is built around the key user segments of a cashless society, the critical success factors for transitioning to a digitalized economy, various industries' strategic investments in the integration of touch-free payment solutions, and the pivotal disruptive technologies in a cashless society. The study also provides a subjective overview of regional performance with regard to the move to the cashless economy; it also examines some of the major challenges that underdeveloped economies are facing (especially in Africa).