Cash Interest Is Falling

When thinking about many things, many people still imagine a paper currency or metal coin with easily recognizable historical figures. For thousands of years, money has been like this. In that period of history, our way of payment will soon be completely changed.

Money in kind is often called cash, which is an innovation. In general, there was no payment structure or method at a certain period in history. People used to trade products for services, and vice versa. This was quite effective for some time, but with the emergence of civilization, the growing demand led to the birth of universal currency. They used to be made of gold or silver, highlighting their great value. Later, precious metals became ordinary metals, and eventually money developed into paper money. They have also experienced some changes. Most importantly, more and more sophisticated security systems are being applied to banknotes to prevent counterfeiting and other criminal activities. But apart from progress, money as a concept has not changed significantly.

What really changed the rules of the game was the introduction of debit cards and credit cards in the second half of the 20th century. The first card was introduced in 1950 and the debit card was introduced in 1966. However, innovative ways of conducting financial transactions and using money did not succeed immediately. When cashless services first became popular in the 1990s, exaggerated advertising around them began. This trend is particularly evident in Europe and the United States. Soon, commercial banks began to introduce more cashless services and various debit and credit cards.

The introduction of the first credit card is undoubtedly a great event in the history of the banking industry. But this will not be the last time. The credit card era in the 1990s brought about great technological development. This is part of the reason why cashless payments began in the 20th century. More and more companies have acquired the infrastructure needed to accept credit cards, and the number of these facilities has increased rapidly in the blink of an eye.

Today, developed countries are dominated by digital technology, and the financial sector is rapidly adapting to today. The 21st century witnessed the rise of the global online market, where users can conduct currency transactions. Many companies listed on websites make profits by buying and selling different currencies. 2009 also witnessed the birth of Bitcoin, a virtual currency. Today, they are also actively trading on foreign exchange trading websites, representing important sectors of the industry.

Cash is disappearing: what will replace it in the 21st century?

The real currency must be falling. Once it is proved that the most accurate source of payment is not as convenient and safe as we imagine, but the lack of confidence in cash is not only due to shortcomings. The new millennium has brought us more diverse ways of payment.

Technology is the real power of today’s world. More and more people can access the global network and need to use small tools. With the increase of global overall expenditure, social mobility is also increasing. It is estimated that Generation Z will become the largest consumer group in the history of the world. The purchasing power of the United States alone is about 143 billion dollars. The requirements for enterprises and service providers are also different. Young people need stable, intelligent and most important digital services. In this regard, the financial industry is trying to meet modern needs.

The development of financial technology began in the same period when the first credit card was born in 1950. No, Pintech was not a term at that time, but the fact is that this intelligent industry is developing into what it is today. It is a combination of financial and technical terms. Now, it covers a wide range of financial services, such as banking, monetary loans and insurance, and aims to compete with traditional service providers.

At present, almost all banks in developed countries provide mobile or online banking services. Without them, it is impossible to establish or maintain a customer base. Whether local or international, the transfer of funds is completed in a few seconds. They have many advantages, including more convenient, faster and cheaper. The security is also very high. When using real money, cash is easy to forge, so the possibility of crime is much greater. In addition, the existence of cash increases the theft risk of the company where the entity branch is located.

Financial technology is completely changing the world. Many people believe that digital services need to be constantly connected to the Internet and can only be well applied in developed countries. But the examples of India and Kenya have changed existing perceptions. In underdeveloped countries that lack in kind financial services, such as commercial bank offices, FinTech has proved itself very useful. By investing in the necessary infrastructure, poor countries can increase the access of ordinary citizens to financial services, which is crucial to economic development.

Some countries have taken important steps towards a cash free future. In 2018, credit card payment replaced cash payment for the first time in the UK. At present, in the UK, only 34% of all payments are made in cash. But it is the Nordic countries that have taken the lead in taking the path of no cash at all. In Sweden, for example, only 2 per cent of total payments are made in cash.

The future without cash is very near, which is a better future for everyone. This will mean providing better, smarter and faster financial services for global customers, while keeping transactions safer than ever. Wiping out the cash of stores and other enterprises will reduce crime, and the security of physical currency is poor, so the fraud will almost disappear. The further development of financial technology and its wider application will also increase the opportunities to receive services around the world and promote the global economy. But for many people, it is still difficult to refuse cash. About 5% of Britons are still totally dependent on cash. In addition, cashlessness will be more realistic in developed countries in the near future. The course still requires sophisticated infrastructure across the country to support transactions. In the near future, many people may not be able to pay or use financial services if they refuse cash. However, it is certain that no cash will be available in the foreseeable or unpredictable future, and financial technology will become its backing.