The Top 3 Cashless Countries
A cashless society is defined as one that doesn’t use cash in monetary transactions. These societies favor alternative means of payment, such as credit cards, contactless payments, or cryptocurrencies.
As of yet, there are no truly cashless societies. But countries around the world are embracing cashless payment systems. It’s hard to predict an exact date as to when this transition could happen, but some experts speculate that it could be as early as 2022.
Listed below are the top three countries that are embracing cashless payments.
Of all the companies moving closer to becoming cashless, most people agree that Sweden is the closest. 85% of the country has access to online banking and only 2% of the country’s transactions consist of cash.
There are a number of reasons for this cashless trend. Sweden has access to a popular payment app called Swish, which more than 50% of the country uses. But the biggest catalyst by far is that most Swedish retailers don’t access cash payments.
It’s not uncommon to see stores announcing that they don’t accept cash payments. In fact, in Sweden, only 20% of all in-store transactions are made in cash.
China also has a vast cashless market, which is mostly dominated by Tencent’s WeChat Pay or Alipay, which is owned by Alibaba. But unlike many other countries, China hasn’t embraced credit card payments. Instead, most Chinese consumers make payments by scanning QR codes on their phones.
Most merchants request payment via QR codes and it’s not uncommon to see QR codes located all throughout China. And this trend is starting to spread to other countries that have a lot of Chinese travelers.
3. United Kingdom
In the U.K., credit cards, online payments, and contactless payments have largely replaced cash payments. Cash is no longer accepted on public transport in the U.K. and the number of available ATMs is dwindling.
Additionally, the U.K. is currently leading the world in the adoption of contactless payments. Nearly half of all in-store transactions are contactless payments. Mastercard found that there has been a 97% increase in contactless payments across all of Europe.
Will the U.S. Go Cashless?
The growing cashless trend has led many people to wonder if the U.S. will eventually go cashless. It is feasible since U.S. consumers are increasingly moving away from cash and embracing other forms of payment.
But there are a number of barriers preventing this from happening. For one thing, many cities are pushing back against the move to cashless payments. New Jersey, Philadelphia, and Massachusetts all have laws in place banning cashless commerce. Legislators in these cities argue that cashless commerce hurts low-income residents.
And more than 70% of all Americans still use cash for at least some of their purchases. However, as cashless infrastructure continues to grow and with the increase of the gig-economy, the trend towards cashless payments in the U.S. continues to lean towards a cashless society. Although the U.S. is currently behind Europe and Asia when it comes to cashless transactions, advances in FinTech (financial technologies) and the preference for mobile payments by Millennials and GenX’ers is leading to ever-increasing adoption of cashless payments by merchants and retailers which are in line with global trends. Though it’s hard to see and feel the cashless effects today, in the next five years paying with cash will be as cumbersome as writing a check is today.
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