09/28/2020 6:56 AM

A Cashless World 2020 - A Threat or an Opportunity for the Fintech Industry?

Society has been moving towards contactless purchasing over the past several years. According to the Fintech Times, there were more card payments than cash payments at the end of 2017, and this trend doesn’t seem to be stopping anytime soon.

The popularity of cashless transactions is in part due to the convenience, but now, with Covid-19 sweeping the globe, the need for convenient, contactless buying is imperative. Consumers no longer need to rely on paper money to buy everyday essentials, but instead can pick from a variety of alternative payment methods.

A cashless society means change for the fintech industry, but what kind of change, and will this change be damaging or present fintech companies with an opportunity to grow?

Coronavirus Speeds Up Cash-Free Purchasing

The current crisis felt in every country could speed up the shift to a cashless economy. In an effort to cut down on disease transmission, many companies and consumers are looking for alternative ways to purchase items.

An article in the Financial Times pointed out that the technology to make digital transactions already exists, including secure biometric authentication, digital wallets, and cards.

Many countries have already implemented digital payment technology. As consumers worldwide decide that cashless transactions are essential during these uncertain times, the need for digital currency will grow exponentially.

Fintech’s Future in a Cashless Society

Traditional retail giants like Starbucks have implemented fintech. It’s safe to say that more large-scale companies and smaller brick-and-mortar businesses plan on transitioning from cash to digital. Businesses are looking for various ways to give their customers safe, secure, and convenient ways to make purchases.

A truly cashless society is almost-certainly inevitable, but a complete transition will take time. Businesses and traditional financial institutions must prepare themselves for cash’s demise and look to work together to create a landscape that caters to everyone. Due to both necessity and technical progress, digital banking and fintech applications are forecasted to grow in popularity.

Fintech’s Opportunity to Grow

Going forward, fintech companies should consider teaming up with national institutions to reach a bigger audience, including those outside of the digitally-savvy demographic. This approach will help customers and businesses provide a more inclusive environment.

Fintech can help expand corporate and local business by providing excellent customer experiences and convenient and affordable banking services. Companies that implement digital solutions that offer fast payments and quality customer service will result in satisfied consumers, making it that much easier to leave the cash behind in favor of cash-free options.

The Fintech industry has already seen a rise in popularity and success over the past five years. Technology has brought the world together. Globalisation in a digital world means a need for faster services, whether through banking, purchasing, or delivering times. Fintech is making all of these things possible, and the future looks even brighter for Fintech applications around the globe.