26 February 2018
There are many things that differ when stepping into a different country. The food. The clothing. The environment. But one thing remains the same is cash flow. Our finances are governed by our standards of living and for many nations there seems to be a barrier between what countries deem as conventional within their cash flow. This can be divided into either a cash or cashless economy.
Let’s take a look at the key trends that are occurring worldwide regarding the influence of cash flow around the world.
Cash has increasingly been perceived as a curse to mankind in many countries, where many aspire to eradicate tangible notes completely. The objective for many countries is to shift into a more cashless economy. As an economy gets closer towards its goal of increasing its cashless nation, the more successful it is. However, many struggle to understand the convenience of this emerging cashless society.
The cashless economy was first sparked during the times where livestock was traded for other goods and food crops, however it has definitely flipped since the influence of the digital world where transactions can be made with the assistance of digital currencies such as bitcoin.
On the other hand the impact of digital transactions where first initiated during the 1990’s, where electronic banking had started to increase in popularity as non-cash transactions were used by technologically advanced nations. It later progressed in 2010 where digital payment methods were more established through tools such as PayPal and NFC payments that were used by e-cards or smartphones and have now escalated to digital wallet systems that are operated by Apple.
Countries such as Australia have in fact removed brick and mortar branches for Citibank in November 2016, purely due to their conventional norms of online banking and digital transactions. Contrastingly, Investopedia recorded that only 4% of Citibank consumers made cash transactions, which forced this shift towards a more cashless society.
Similarly enough, Singapore also possess a comparable conventional cashless society with the goal of leading this cashless realm in Asia. Over hundreds of retailers have already assimilated into this norm where they have incorporated a “Sorry, No Cash” policy and have embraced the influence of bitcoin.
Additionally, Sweden is actually the closest country to becoming cashless. How ironic, the first country to implement banknotes in 1661 have now shifted to 80% of all transactions being digital cards or through apps!
Contrastingly, this boom in the virtual cash flow within countries such as Australia, Singapore and Sweden does not reflect the entirety of the world, whereby many Asian countries such as Indonesia still consider the conventional cash flows as the simple use of paper money. In fact, KPMG recorded that only 54% of the Indonesia population over 15 are unbanked, which evidently implies this lack of a cashless society. Due to this, the digital world of online banking seems merely impossible when shifting towards a cashless economy as internet banking is not as swift as many countries. This is because Indonesian banks require users to input a series of codes to secure the device. All in all it doesn’t really appeal to everyone if you have to go through such as hassle of typing down codes just so transfer money.
An example of Indonesia’s conventional cash flows being a cash- based society was the implementation of Uber in 2014. With Indonesia having a population of over 260 million and only 143 million owning a debit card and 17 million possessing a credit card, many cashless companies really did struggle.
Despite this cash dominated society Indonesia has made an effort to implement cashless payments through toll roads to fulfil the governments hopes of creating a cashless society. Jasa Marga, Indonesia’s leading toll road operator is prepared to face potential discrepancies due to its big transition to e-cards.
Overall, conventional cash flows are quiet a complex phrase particularly due to the fact that each country are currently in different stages of implementing a more cashless society.