When was the last time you needed to carry cash? With the rise of digital wallets and near-field communication (NFC) technologies such as Apple and Samsung Pay, cash has been deemed even more insignificant as we go on with our day-to-day lives. Money transfers now are also more convenient than ever, making it extremely easy to pay family and friends the money you owe without forking over exact change.
According to The Pew Research Center, about one-third of Americans under the age of 50 make no purchases in a typical week using cash with more than one in 10 millennials reportedly using their digital wallet for every purchase in a separate report by Experian.
Like it or not, credit, debit, and NFC’s have gradually dethroned cash as the main mode of payment. With that in mind, here are some of the top reasons why you should go cashless in this year.
Ease of Not Carrying Cash
While it sounds intuitive, this remains the top reason to go cashless. Consumers want greater access to mobile tools and payments, even at the physical POS. Customers are drawn to payment methods that involve the least amount of time possible. With the rise of digital wallets, the tap and go method of payment seems so much more convenient than fumbling for cash in our pockets and having bills bulk up our wallets.
Aside from the added convenience, going cashless and the use of digital wallets is actually a lot more secure than most people think. If you drop cash on the streets, chances are it’s gone forever. Cashless transactions are usually protected by end-to-end encryption, fraud-preventing technology and digital receipts so it’s less susceptible to theft, unlike physical cash.
Another upside of using cards and contactless payment technologies are the rewards that come with it; rewards in the form of cashback, loyalty points, air miles, etc. that are easy to redeem. Loyalty and rewards programs have needed to evolve as consumers increasingly manage the majority of their daily lives through mobile devices in today’s era of a cashless society. Most of us prefer not having to browse through physical catalogs and track reward points. We want flexible rewards offerings and access to our loyalty rewards anywhere and anytime. Chains like Starbucks offer a free drink when you earn rewards by paying on their mobile app, so it definitely provides an extra nudge to work to get free rewards on purchases. While extra rewards should not be an excuse to overspend, it can certainly offer some extra cash from big-ticket purchases that you would have bought either way.
Track Your Spending
One of the best parts about paying electronically is seeing exactly where your money goes. Since everything is digital, the e-statements act as a window into your spending habits, which makes budgeting easier. For example, a $5 Frappuccino might not seem much when you pay using cash since there’s no trace of the transaction apart from the physical receipt, which most likely, let’s face it, ends up in the trash. But when you charge that same expense to your card, you’ll know exactly how much you’ve spent on coffee during the year…a whopping $1,825 on Frappuccino. That definitely puts coffee in perspective!
A Faster, More Convenient Way to Remit Money Back Home
The payments landscape has experienced a wave of innovation and is driven by technological advancement. The decline in cash payments is also changing how people are sending money abroad. As the cashless society gains momentum, long lines of migrant workers outside physical money transfer stores become a less common sight. Money can now be transferred speedily and securely and at an even lower cost with just a few clicks.
Electronic wallet solutions have transformed the functioning of financial transactions entirely and it is becoming the most preferred mode of payment in today’s world. They give users greater flexibility, convenience, offer better security, ease of use, and more importantly, they play a vital role in shaping our future payment methods.