Cash Extinction

Contactless Chip Technology has become more popular especially due to the Covid-19 pandemic. People do not want to touch items and it is safer to use the “Tap and Go” method with the Contactless Chip card. Now that companies have been updating their terminals to accept this method of payment, there have been numerous benefits for merchants as well as for the banks since this payment method has become heavily used nationwide.

Besides some of the key features such as “safe” “quick” and “easy” offered by using contactless pay I believe the other reason that people have been using the contactless card is because they like the technology aspect behind it. People like staying up to date with the current technology trends. They like the idea of having a digital wallet versus actual cash. Not only this but their data is more secure since when you tap and go, you don’t use your pin so your card information cannot be hacked, and fraud is less prominent.

There is also the benefit with the consumer who is offering contactless payment options because they will experience better operational efficiency. Since this type of check-out is quicker, transaction lengths will be shorter which will cut down the wait times and lines at the stores. Therefore, less staff will be required to work at the register and less time will be spent counting cash thus allowing more staff to be readily available on the floor to improve customer experience.

Banks will also be benefiting from the use of contactless cards. It is projected that banks will earn approximately $2.4 billion between now and 2022 (Kearney, A. T.) from the use of contactless payments. Banks would save money on operational costs such as labor reductions because less cash is being handled. Spending has increased with the usage of contactless technology across the world as you can see in the graph.

(Source Consulting.us)

Overall, I believe that the future of paying for goods and services will become cashless and people will be accustomed to using their digital wallets. I predict less need for physical banking centers since the future will be paying digitally including sending a friend or family money, paying for rent, purchasing food or retail and so forth. There are many possibilities with the use of AI technology such as digital payments that are linked to our biometrics making check out and payments even more secure. I also predict that marketing wise, retailers will offer loyalty programs in connection with their contactless payment. This way there will be automatic discounts, loyalty points and consumers will gain rewards all while they are making a purchase with the “Tap and Go” method. Soon cash will be rarely used since the benefits of using your contactless card will outweigh the hassle of getting cash out of the bank.

Sources:

Kearney, A. T. (2018, August 1). US banks could generate $2.4 billion from rolling out contactless cards. Consulting.us. Retrieved November 10, 2021, from https://www.consulting.us/news/amp/682/us-banks-could-generate-24-billion-from-rolling-out-contactless-cards

Lulic, M. (2020, August 27). Council post: The future of contactless payments: Three predictions for the next five years. Forbes. Retrieved November 10, 2021, from https://www.forbes.com/sites/forbestechcouncil/2020/08/28/the-future-of-contactless-payments-three-predictions-for-the-next-five-years/amp/