In this increasingly digitized world, more and more transactions are being done without a single physical dollar passing hands. The rise of credit and debit cards along with e-commerce websites like Amazon and Alibaba are making people more comfortable with virtual transactions and making physical cash increasingly irrelevant.
From the looks of it, especially with computing and virtual storage costs becoming less inhibitive, it is becoming more and more practical for businesses to conduct most if not all their transactions virtually, making physical cash not just an historical relic bound for the museum, but also actually becoming an active hindrance to business efficiency.
The Trend Towards A Cashless Society
As the global economy becomes increasingly interconnected, more and more people end up having to interact with people and vendors from different countries. While this meant increasing opportunities to do business, it initially presented a problem when it came to making payments. Put simply, the money in your pocket is not accepted everywhere you go.
This is where virtual payment systems come into play. By using a virtual payment system, parties are able to make payments to each other and conduct business without ever having to see each other face to face or worry about payment issues as many of these online payment systems either use a single standard currency or convert currencies without much hassle.
Nowadays, it is not just businessmen and large online sites that are turning away from cash. More and more shops and restaurants are experimenting with not accepting cash. Some have even gone further than that, not even accepting card payments, instead taking only virtual payments. Although some are finding the shift uncomfortable, most are easing into the change.
In the future, in can even be expected that entire government might opt to go cashless in their daily operations and perhaps consider phasing out their physical currency altogether. In certain countries like Sweden and China, it is actually becoming difficult to use cash in some places as many businesses there have stopped accepting cash payments altogether.
The Benefits and Potential Backlash
The main benefit of going cashless is the reduction in transaction costs. Handling cash can be costly for a business, not just because it has to physically send it to a bank vault for deposit, but also the added costs of having to have adequate change reserves at hand to service cash payments. Digitizing simply removes this issue completely.
Another benefit is the reduction in potential robberies. By not having cash on hand, there is no way a robber could break in a store to steal cash if there is none. If more and more shops made this transition, it would become increasingly redundant to rob physical stores for money, and you would start to see a merciful reduction in these negative occurrences.
There are some potential drawbacks, however. Chief among them is the unwillingness of certain segments of society to change with the times. The elderly are usually the ones who find change most difficult to come to terms with, in this case simply because they have been using cash and even commodity money all their lives.
Another potential downside is the increased risk of cybercrimes. Even though the physical threat might be reduced, the risk of being hacked becomes increasingly prominent. If left unprotected, businesses could stand to lose far more from a single hack than a simple robbery. Therefore, cybersecurity is extremely important when digitizing.
How To Take Advantage of Digitization?
There are countless ways to leverage the digital age. One way is by plugging into the digital payment system in a sensible way. Finding debit cards or credit cards that give the best rewards on the money you spend would be a great place to start. This also has the added advantage of giving yourself a good credit footprint to be taken advantage of later in life.
You could also consider starting your own online business. Virtual businesses have very low startup and maintenance overhead costs simply by not having a physical location. This essentially eliminates one of the largest barriers to starting a business. This gives people a greater variety of options to make a living.
You can also just sit back and enjoy the lower prices of products that are sold online. As businesses lower their costs by going online, in a competitive market a portion of those savings will end up in the pockets of the consumer.
Ultimately, having an open mind to the changes going on around you will enable you to see opportunity in places never previously thought possible. By looking out for changes and not being afraid to make changes yourself, you will be able to seize opportunities on whatever comes along and take full advantage of it by being flexible enough to adapt as needed.
Welcome to the 21st Century!
It has been said before that the only constant about the world is change, and this century will become the one that truly embodies that saying. Previous centuries of monotony are being upheaved by even greater rates of change. This shift seems to be unstoppable, so it might as well be used to your advantage.
There is no doubt that the digital revolution will bring many hiccups, just as the industrial revolution before it did. Unfortunately, this is the nature of change. Certain traditional ways of doing things needs to be set aside to allow things to move forward. But at the end of the day, one can only hope that it will be for the better!