The digitisation of the world’s economy and financial market continues at pace, and this is borne out by the rising prevalence of non-cash transactions.
For example, it’s thought that 62% of all transactions in 2006 were conducted using cash, but just 10 years later this had slumped to 40% as card payments became increasingly popular.
This percentage has slumped further in the wake of contactless and mobile payment innovations such as Apple Pay, so what exactly does the future have in store for cash as a viable entity?
Assessing Customer Preferences in 2021
As we can see, the shift from cash to digital payments has been visible since 2006, but it was interesting to note that the decline of the former was accelerated markedly during the coronavirus pandemic.
This was reaffirmed by a study conducted by YouGov, which found that most countries in Europe were not eager to return to pre-Covid levels of cash usage going forward.
While this trend was bucked in the US, nations on the continent (including the UK) saw most of its customers (23%) keen to embrace increasingly digital payment methods such as contactless and Apple Pay.
This is thanks to a combination of both convenience and optimal hygiene in the wake of a global pandemic, while the decision to increase the contactless payment limit to £100 for single transactions has also proved to be impactful.
As for card payments, it’s increasingly clear that debit cards are preferred to credit card options, both from the perspective of responsible spending and accessibility.
After all, 27% more consumers have access to debit cards or bank accounts than PayPal, while the number of new credit card accounts fell by 65% during the pandemic.
What are the Best Alternatives to Cash and Bank Accounts?
Undoubtedly, contactless cards and mobile technology such as Apple and Android Pay have provided the most popular cash alternatives, which are linked virtually to your bank account and allow transactions using technology that’s known as near-field communication (NFC).
This technology also allows accessories such as smartphones to make payments at the point of sale, while it’s estimated that 36% of all transactions will be powered by NFC-equipped devices by the year 2027.
These technologies represent an evolution of the existing payment and financial system, as they’re still directly linked to a traditional bank account. However, there are other digital payment methods that exist within a completely different ecosystem, with cryptocurrency offering a relevant case in point.
In this respect, so-called “crypto wallets” are emerging as an increasingly mainstream bank account alternative, in which various tokens can be traded and exchanged utilising private keys to secure transactions.
Despite the inherent volatility of crypto assets, such entities are completely decentralised and removed from a central point of control, while they utilise blockchain technology to create a transparent and ultimately immutable record of transactions.