OK, we have all heard that ‘cash is king’. But is that still the case?
It was not very long ago, I felt the pinch of being cashless in the truest sense. It was during a trip to Havana on route to Mexico City. As usual, I wasn’t carrying too much cash in my wallet but as I landed in Havana, I quickly realized that cash is what moves in Cuba because of the international sanctions and embargoes. Well, sure enough, this incident made me extra cautious and consider emergency cash, when in doubt.
Fast forward to 2021. Today, the cashless revolution is upon us. Joining the cause was something that came naturally. These days, I no longer carry a wallet as all I need is my smartphone and watch, which acts as my on-the-go cashier and accountant.
It is undeniable that cash continues to play a crucial role, and there is still significant demand for it. But 'cashless’ is our new reality — and one here to stay. According to McKinsey, in the UAE, digital payments have been on the rise well before the pandemic, with a growth rate of more than 9 per cent annually between 2014-19.
Small businesses sign up
Undoubtedly, the pandemic has amped up digital transformation, laying a faster track to a cashless future. At the local level, we are witnessing the emergence of a whole new spectrum of players, who have joined the wave by rolling out specialized payment platforms to suit smaller and mid-sized businesses.
Interestingly, we have seen the SME sector becoming the ultimate benefactors of this trend. While big businesses have been early adopters of digital platforms, to see so many more small and midsized ones joining the game has truly transformed the scale of digital payments.
The main appeal of cashless payments is linked to convenience - but there is more to it. The plug-and-play model allows businesses to enable faster payments, strengthen their digital infrastructure and lower operating costs. In this context, it is safe to say that embarking on the digital drive is no longer a nice-to-have feature but a must-have.
One way, multiple uses
Businesses must venture into not only adopting digital payments, but also look at integrating the digital user experience in the form of app-based payments, e-wallets, QR codes, point-of-sale, pre-paid cards, and UPIs that integrate multiple bank transactions, among others.
From a user perspective, cashless offers safety, security and peace of mind. There is always the looming threat of cyber hacks and internet fraud but features such as M-Pins, Biometrics and OTP enabled transactions are giving confidence to retailers and customers previously hesitant to use online payment portals.
For most of society, the benefits of being cashless outweigh the negatives. While it is clear fintech enables businesses, it should be used to solve critical problems, be it accessibility, improving financial inclusion or creating a sustainable future for all. Because ultimately, the primary role of technology in any form is to better lives…