Cashless societies imminent in emerging markets around the world
By Brian Richardson, CEO and co-founder of WIZZIT International
By Brian Richardson, CEO and co-founder of WIZZIT International
Brian Richardson, WIZZIT International CEO and Co-Founder, is sure that it is.
Advances in technology has had a huge impact on commerce and how money is defined and interacted with. Cash as a means of payment has been on the decline for decades. In the digital age, a cashless society is the essential next step in economic evolution.
First-world countries like Canada, Norway, Sweden and Denmark are tightening the noose on hard cash with intentions to abandon it altogether. New laws prohibit large cash transactions and many bank branches no longer accept or offer cash. Retailers in Denmark are authorised by the government to refuse cash payments for petrol and groceries. Even donations to the homeless are made with tech innovations to ensure that all population groups can make the transition into a cashless society.
In emerging markets, the picture is very different.
The state of financial exclusion
Out of 7.5 billion people and a mobile phone in almost every pocket, 2 billion adults worldwide are unbanked. Financial exclusion is pervasive in emerging markets in Africa, Eastern Europe, Asia and Latin America and is often a reflection of the state of economic growth and stability.
According to the World Bank, only 67% of the Russian adult population has access to a bank account – a far cry from figures in Western Europe and North America. Russia’s cash-dominated culture is mainly due to the public’s distrust of card payments. A similar situation exists in Africa, where only a third of the population have access to financial services.
Despite advances in digital financial services, building trust in cashless payments is essential for widespread adoption.
Breakthrough innovations by FinTech partners like WIZZIT International, are radically enabling financial inclusion in emerging markets with banking solutions like Virtual Card – a secure and affordable online payment alternative that provides users with one-time card details that self-destruct after a set time limit.
Emerging markets will go cashless with or without banks
Cashless payment methods are cropping up in multiple ways in most emerging markets, indicating how natural and necessary cashless transactions are.
Going cashless offers new ways to manage economic growth and drive financial inclusion. Mass markets who do not qualify for traditional banking services like credit cards, could have access to innovative digital banking solutions. This is a key enabler of sustainable economic and social development in emerging markets.
With the rapid rise of mobile penetration, the stage is set for the rapid adoption of digital and mobile financial services. Innovative banking technologies, like WIZZIT’s Mobile Wallet and Virtual Card, are disrupting established financial models while fast-tracking financial inclusion and the digital transformation of banking.
Going cashless also opens the door for online shopping to flourish. Although E-commerce in Russia still only represents about 4% of the total retail market, the market has grown by 21.4% in the last three years. E-commerce in Africa is growing by 26%every year, as is the demand for alternative online payment solutions. Mobile Banking and Virtual Card alleviates traditional online shopping barriers like the fear of fraud and access to credit cards.
Superior security and profit potential
In a cashless world, money is nothing more than electronic ones and zeros transferred between computers in seconds. Without physical money to count, process, transport and store, banks can raise profit margins by cutting down on related security risks, costly ATM maintenance, delinquent loans and human error.
Cash is expensive for consumers too. Cash can’t earn interest and can easily be stolen. And the inconvenience of going to ATMs and bank branches can easily be eliminated. Digital payment solutions like mobile bank accounts and mobile wallets, cut the queues and put customers first in line, every time. It is a secure and convenient alternative to cash under the mattress and supports purchases, cash deposits and withdrawals, money transfers and prepaid vouchers.
The bright new age of banking
There will be no cash in the future and there will be economic transformation. Banks had better get on board or risk their own survival. FinTech innovations that cater for the unique financial needs in emerging markets can give banks an unparalleled competitive edge. By partnering with mobile banking pioneers like WIZZIT, banks can reach the unbanked population and be ahead of the curb with the right tech innovation and partner in their arsenal.
Contact WIZZIT for more information on getting your bank up to speed with technologies useful to your customers. Visit www.WIZZIT-int.com
Brian is the co-founder and group CEO of WIZZIT International. Brian is recognised globally as a disruptive innovator in the financial services space. He’s fostered powerful partnerships with major FSPs around the world to advance mobile banking technology.
Brian is a sought-after speaker at conferences, events and business institutions around the world – including the Harvard Business School – to share his expertise and knowledge. He’s also an Ashoka Globalizer Fellow – a worldwide network of social entrepreneurs.
Journal: PLUS Journal 4 (251) 2018
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