Cashless transactions – an advantage
by Abdul Aziz Mondal Banking Published on: 05 October 2018 Last Updated on: 17 March 2020
Electronic payments stimulate the development and growth of profits for businesses, while at the same time enabling better control, which in turn deters criminals. It brings in more in taxes, ups the level of social services, and much more. As per the “Cashless cities. The advantages of electronic payments” research, which was done by Visa, the main advantage to the consumer in case of going cashless and transferring to an electronic-based payment systems is time. It seems obvious, but one can’t forget, that a city resident spends at least 32 hours a year on bank visits, getting cash at the ATMs, and paying bills – and that’s not counting the lines. if enough people go cashless, they can get 8 of those 32 hours back.
Besides, using cash is expensive. In the USA alone it costs the government 200 billion dollars a year. In India, cash payments cost 28 billion dollars. There are costs to transit, enforce, guard, bank services, governing, review and processing, and outgoing payments for suppliers.
We can’t forget about theft, cash shortage, and counterfeit money, which cost a whopping 4% of income a month for many organizations, As Peter Bowfinger, member of The Economics Expert Council notes “coins and paper money are only making payments more complicated for all sides.” Maybe that’s the reason that in December 2016, Bank of Korea announced plans to abandon physical coins by 2020, the first step to a cashless South Korea.
Considering the drawbacks of physical money and the spread of digital tech, it’s no surprise that all over the world, consumers pivot to digital transactions. Growth rates for e-retail are 4 times higher than that of brick and mortar, and mobile retail is up eightfold. Experts are predicting an explosive growth of mobile payments, which should reach $3,4 trillion by 2022.
As soon as organizations start accepting electronic payments, their income grows, on average, a whopping 17%. The bigger the organization, the bigger is the growth when pivoting to e-payments. Large corporations note a spike in sales as a result of accepting e-payments by 22%.
Different companies profit from accepting e-payments in their own way, but they are all, undoubtedly, significant, and not only in terms of expanding the sales volume. Companies also get more quality data to analyze the client base and therefore employ effective marketing for their products and services, such as loyalty programs, motivational offers, etc.
Renato Andrade – a representative of CreditPilot, told about a client’s positive experience with transferring to e-payments and installment of CreditPilot’s platform – the Any2Any. “Since the initial launch nearly 2 years ago, the company has seen their financial services users grow from zero to around 5% of their entire customer base, totaling some 2 million subscribers. CreditPilot offers its clients different proprietary solutions, so additional products have been added since the original launch – several of them tailored for specific niche markets, but all based on the basic Any2Any platform” – says Renato, when asked about the concept of Any2Any for creating quick money transfers to and from bank cards, cash, and bank accounts.
As per the annual research by RBR “Global Payment Cards Data and Forecasts to 2022”, by 2020 the number of card-based online payments in the world is going to grow by 70 billion (it was 28 billion in 2016). Even now, it’s obvious that it’s going to affect not just the user experience of the clients buying and paying for services, but is going to have a positive effect on the income of the big and small business, is going to lower crime and raise the effectiveness of social services. 2020 is close, so to find out, if the predictions are true, and see the new FinTech solutions that make our lives better, one won’t have to wait long.
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