Cashless

 I was thinking about the last time I used cash. It was a while ago. The last time I went into a bank was to pay in a random cheque someone sent to me. I can't remember the last time I wrote a cheque and I no longer have a chequebook. 

Statistics show most people in Britain pay for their daily needs with contactless payment. It is now looking at increasing the limit to deal with the demise of cash. ATMS are now harder to find. Bank branches are closing. Some towns don't have any kind of bank branch. Online only app banking exists with Monzo and Revolut, to take two examples. FinTech, the meeting of technology and finance, is definitely a think and not just part of startup culture. On the edge of this is the more exotic world of crypto currency and Bitcoin.

In what we call the developed world the fastest moving countries towards the cashless society is in the Nordic regions of Europe. Sweden may abolish physical cash by 2023.


Sweden is using a combination of NFC technology and phone based apps. NFC (Near Field Communication) is a chip. The chip can be embedded in a payment card or phone. When it comes into close proximity to a payment terminal a payment can be made. 

Swedes also have Swish. Its a payment option agreed between all the banks operating in Sweden. This second option can be used as person to person payments. It simulates cheque payments and leaves out other types of web based payment like Paypal. 

The "pay by bank" option is not everywhere. In Britain small monetary transfers often means that you have to enter sort codes and account numbers into banking apps. This can lead to inaccuracies and, in some cases, fraud. In 2014 a "pay by bank" system was proposed by Zapp Payments. This doesn't seem to have been supported by banks and has never come out of just being a flashy website. The website is currently being used by Mastercard as Mastercard pay by bank. It seems to be getting no traction either.

There certainly isn't anything universal in the UK like Sweden's Swish system.

Outside developed countries the technology is different. With millions having no bank accounts at all and millions having bank accounts that don't do very much the technology leap is already there. In China, credit and debit cards were strictly controlled. As cheap mobile phones became available, technology companies rather than  banks were at the centre. Apps on phones developed by TenCent and Alibaba became the main method of day to day payments. The two apps are called WeChat and AliPay. 

These products use QR codes rather than nfc. This means the Chinese don't leave home without their mobile phone and don't care about having cash.

There are lot of questions associated with the move to a cashless society. What about financial exclusion? People who don't understand how to use technology? Privacy and the monitoring of our finances. 

Historically the move from physical tokens of value like gold and silver happened centuries ago. People took a while to accept that paper with numbers on it were as good as a silver coin or a gold coin. The transition to cashless is going to happen. Its already happened for millions of people. Get ready. 

**This article talks about finance. I am not qualified to advise you to open an account or use any of these services. None of the mentions here is a recommendation. Do your own research. 



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