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Education

Of course, regardless of whatever flashy new point-of-
purchase technology is currently en vogue, the transfer of
funds is still handled via the traditional digital payments
infrastructure, including linked bank accounts or credit
and debit cards.
Resistance to going cashless

These technological "proofs of concept" are receiving a lot of
media attention and may give us a glimpse into payments'
distant future. But the fact that Amazon revised its cash-
less retail store strategy, and places like Massachusetts and
New Jersey banned cashless retail, citing privacy concerns
and discrimination against unbanked, poorer citizens,
shows us that enormous friction still exists in the move to-
The challenges of ward frictionless, universal, digital payments. (For details
on cash-friendly legislation, see "NYC Pushing Ahead With
Cashless Retail Ban, Joining Neighbors," published June 10,
moving toward a 2019, by Bloomberg Law.)

cashless society While the United States has slowly transitioned to approxi-
mately 60 percent cash-free transactions, in other areas of
the world, even more resistance to abandoning cash and

By Cory Capoccia moving to greater adoption of digital payments remains.
There are often cultural and political reasons for a prefer-
Womply ence for cash. Germany, for example, has emotional con-
nections to cash, and 74 percent of Germans prefer the pri-
t's been said that "cash is king," and in many cases it's vacy, speed and ease of cash for individual transactions,
still true. Despite our industry's myriad methods and including an astonishing 96 percent of transactions under
means of facilitating nearly instant digital payments, 5 euros, according to research cited in a Feb. 14, 2018 CNN
I roughly 40 percent of in-person transactions in the Business article by Ivana Kottasová.
United States are still made with cash, including 55 percent
of transactions under $10 – according to a recent report Japan, despite being a global technology and economic
from the Federal Reserve Bank of San Francisco titled 2018 power, still favors cash for roughly 80 percent of payments,
Findings from the Diary of Consumer Payment Choice. according to data released by Visa on July 24, 2019. And
though about 90 percent of South Koreans and 70 percent
For consumers, the attraction of digital payments would of Chinese favor digital payments, Southeast Asia overall
seem to be self-evident. Card-based transactions provide has no clear payments leader, and cash remains the pri-
convenience and security, online and off. Many credit cards mary means of conducting business.
provide additional benefits and perks, such as valuable
points, airline miles, cashback bonuses, concierge services, In India, failed governmental demonetization attempts to
automatic purchase protection and more. severely restrict or even ban the use of cash solidified hard
currency as the primary or even sole means of payment for
Pursuit of frictionless digital payments many Indians due to multiple factors, including inflation,
Cashless payments are indeed on the rise. Platforms like economic instability, tax law and people's preference for li-
Venmo and Zelle continue to attract huge numbers of quidity in uncertain times. One contributing factor is that a
new users, as consumers recognize the value of instant, large percentage of the population doesn't have a bank ac-
secure P2P payments via their mobile devices. Cashless count. (For more background, see "Do not fret about India's
retail stores like Amazon Go have opened in several U.S. cash economy," published Feb. 12, 2019, by The Economic
cities. Many vending machines now accept cards, and Times.)
biometric, facial-recognition vending machines now exist Issues with burgeoning payments technology
in China. Amazon is currently running trials for hand-
print recognition payments systems. Furthermore, there remains a practical barrier to truly
widespread adoption of biometric or visual item recogni-
Prominent Olympic and World Cup events have gone tion-based purchases: they're clunky and slow. Much like
cashless in favor of NFC/RFID "wearables" linked to digital the false starts made by fledgling credit card companies in
payments, and even the NFL has touted several "cashless" the 1950s and '60s, setbacks with new payments methods
stadiums requiring card transactions for all concession will undoubtedly occur.
purchases, which streamlines the checkout process and
shortens the wait times for hungry fans.
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