Consumers being able to access fast internet nearly everywhere gives them the capacity to tap into online payment ecosystems, which were formerly unavailable. Payment applications and the supporting payment infrastructure ecosystems give mobile devices the power to do a lot of things online, such as shopping. Now, it is easy to use an app to buy goods, get services, pay for bills, take out loans, and do bank transactions.
Digital commerce can be worldwide when most people in the world have a mobile device that can make a payment transaction. There is also the digitization of money and the Internet of Things that bring about a connected economy. This decade brought about dependence on online payments like never before because of the pandemic that made people stay in shelter.
Cash payment transactions
The demise of cash payment transactions in some societies such as that of Sweden, Korea, and China was brought about by their governments’ push for digitization. Yet, forced to go online as a means to purchase groceries and more, there are more areas now in the world that use online payments as their preferred methods instead of cash.
Shifting from cash
The rapid shift from cash to online payments is also due to factors such as having cheaper mobile devices and faster internet. It accelerates the demand of consumers to move to online payment methods. The networks that provide cash-in and cash-out also have a critical role in this transition from cash to digitized money.
Out of the over 7 billion people globally, over five billion own a mobile phone. That equals roughly about sixty-seven percent of the entire world’s population. Studies show that in about five years, the percentage will increase to over 70 percent. Just a few years ago, a smartphone’s average cost was over three hundred dollars. Yet today, one can buy a smartphone for about a hundred dollars. Over time, due to advancements in technology and fierce competition in the mobile phone industry, the prices will become much lower.
Aside from the ever increasing demand for smartphones, there is faster internet with many of the markets moving from 3G to 4G and then to 5G. In some of the developed markets, there is a rapid switch from 4G to 5G. The changes are happening much faster than anticipated. According to the payment transaction tracked in over sixty nations during the past decade, those countries that still use cash as the preferred payment method have only experienced modest growth. Cash is rapidly declining as the preferred payment method in developed markets such as that of the US as digital payment methods are widely in use.
Preferred payment method
This decade will see the rapid deceleration of the use of cash as a payment method in many economies. Though vital, cash is mostly becoming digitized globally, and more consumers are demanding to be in the digitally connected world by making online payment transactions. There is also an increase in the demand for platforms for online payments, as there is a requirement to suit the needs of the consumers.