The popularity of digital wallets has increased significantly over the past few years. Digital wallets are now a common tool for day-to-day transactions because of their friendliness, convenience, ease of use, and security.
Today, almost everything has gone digital, both in the government and private sector. The use of digital wallets is one change that creates a significant impact in terms of providing enormous convenience and benefits to both business owners and customers. The use of digital payments comes with many benefits, and many countries have leveraged and benefited from it.
Hence, can digital wallets phase out cash and plastic cards? Will digital wallets die gradually and pave the way for cash and cards? Or will digital wallets replace cards and cash completely?
Smartphones are almost everywhere today, both in developed and developing countries. In the UAE alone, a whopping 91 percent of people are using smartphones. As such, many people are now familiar with mobile applications and use them on a regular basis. Here are some of the things that make digital payments a top choice over cash and cards:
Once in a while, we all get stuck in a queue in a supermarket or grocery store while waiting for a customer to search their bag for the exact amount of change. This can be time-consuming and it is not something anyone wants to experience more than once. Fortunately, we can prevent this with digital wallets.
With a digital wallet, all you have to do is to scan a barcode, take your phone close to the POS system, or do a direct transfer from your app. This will make the transaction practically instant. People will no longer have to spend a lot of time in queues. It also eliminates the need to worry about having enough cash at hand when going shopping or having to search for your credit card, which can also be time-consuming.
Another major benefit of digital wallets is that they reduce costs. This might not be beneficial to customers, but store owners will greatly benefit from it. Storeowners using POS systems do not need intermediaries. An example of this is the introduction of touchscreens in the fast-food industry.
With this, customers can place orders, pay with their digital wallets, and only interact with an employee when they want to collect their food. As a store owner, when you have fewer cashiers, you will save a lot of money on the overhead costs of running your store. This will save you a lot of money, which you can use to improve your business.
Another amazing benefit of digital wallets is that they allow for very fast payments. With a digital wallet, you no longer have to dig into your purse or wallet to look for your card or cash. Even when you find your card, you would still have to wait for the cashier to input your payment amount and then enter your pin. With a digital wallet, all you have to do is to wave your smartphone over the POS system.
Security is one of the major concerns of many businesses today. Before choosing a digital wallet, you need to carry out extensive research, as there are risks that come with storing your money and information online. However, top digital wallets have advanced security protocols, as they are well encrypted and protected. They ensure your money and personal information are always safe.
Another major benefit of digital wallets is that the chances of theft or robbery are very slim. Thieves can steal your cash easily. However, stealing money digitally is not easy, as a lot is required. With the top-notch security systems of service providers, it is very difficult to steal money digitally. Service providers offer secure transactions and tight security systems that keep hackers at bay.
Physical cash still has a strong ground in society; it still serves a very important purpose. Cash payment is still the major means of payment across the globe. About 85 percent of consumer payments across the globe are made in cash. In most countries, cash is still king, as it accounts for the majority of retail transactions.
Banks, card companies like MasterCard and Visa, and other electronic service providers aim to phase out banknotes and coins. This is because they do not make money from cash transactions. Hence, these companies have continually published studies showing the enormous cost of printing cash. Credit cards are also a very expensive means of payment for merchants and consumers, which is why most of these companies are now moving into digital wallets.
However, cash also has a wide range of advantages that you cannot compare to digital payment methods like digital wallets. People have higher trust in cash than other digital means of payments because cash is provided by central banks while other payment methods are provided by commercial companies.
Since the adoption and use of technology is on the rise, the use of digital wallets is also on the rise. Digital wallets will increasingly become popular because there are more tools through which people can now access them. The number of smartphone users is increasing every day, and people can access digital wallets with their smartphones.
Undoubtedly, cash is more accessible, as you do not need a smartphone to access it. Nevertheless, that gap is closing gradually, as most people are now using smartphones with access to one or more digital wallets.
Back in 2015, the global mobile payment revenue hit a high of $405 billion. That value is expected to surpass $1.3 trillion by 2022. Hence, with all indications, it is possible that digital wallets will replace cash and credit cards. However, this will take a very long time. There need to be more advanced technological improvements for this to happen.
There will always be customers that will prefer to make cash payments or use their credit or debit cards to make payments. Nevertheless, with every year that passes, cash and credit card payments will be losing a fraction of their dominance to digital wallets. The process might be gradual, but it would become notable in a couple of years. In a few years from now, paying with cash or credit card would be like paying with a check today.
However, the current challenge with digital wallets is not the accessibility of the wallets, but the acceptance. Digital wallets are very easy to access, as everyone with a smartphone can access them. Nevertheless, many merchants are only open to limited payment options – mostly credit cards and cash.
Nonetheless, some merchants and businesses upgraded their payment systems and started accepting payments via digital wallets. More businesses can start preparing for this trend by expanding their payment options. They can upgrade their equipment and train their employees so they can start accepting payments through digital wallets.
In a few years from now, businesses that do not adapt to this payment method will have a hard time retaining their customers, as people are increasingly looking for better and simpler approaches to life, which is what digital wallets offer.
Many people still prefer using cash for a wide range of reasons. Cash will continue to exist because of the freedom of consumers. With cash, consumers will not be beholden to banks and businesses. However, with the advancement in technology, more businesses will start embracing newer ways of payment.
Every payment tool has its advantages and disadvantages. With the importance of cash and cards, it seems like it would be impossible for digital wallets to replace them. Nevertheless, it is possible for digital wallets to replace cash and cards, but the process will take a long time. Cash is still useful and relevant, and both cash and digital payments will continue to co-exist for a few more years.
Cash and card payments are currently the dominant payment methods, because almost every business (both online and brick-and-mortar) still accepts them. Many people are skeptical of using digital wallets like payit.
However, many are ready to embrace this payment method, as it is convenient, fast, secure, and very easy to use. Hence, digital wallets can replace cards and cash, but it would be a long process. While digital wallets can replace cash easily, credit cards might not go away easily, as they are also a convenient and easy payment method.
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