Cashless is priceless: Imagining a cashless life
We believe that cash and ATMs will lose relevance in the future. Bangladesh Bank has announced a vision to become cashless by 2027. In that pursuit, Standard Chartered intends to restrict access to ATMs only to the branches from next month
Cash has been the dominant mode of payment for centuries. But is it still the best way for us to transact? The answer is obvious – it is not.
So, how will going cashless make our lives better? Let's imagine a few scenarios.
Convenience
Imagine you are at home, cosy and comfortable, enjoying quality family time. A spanner in the works – you have forgotten an essential item from your monthly shopping list. It is raining outside, accompanied by the heavy traffic that inevitably follows. The last nail – you are short of cash! Now your mobile banking app or your mobile financial service (MFS) provider would be a lifesaver, saving time, money and energy. Cashless will feel priceless.
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Cashless payments are faster, easier, and more secure than cash transactions. We no longer need to worry about finding an ATM, carrying enough change, or counting money. Cashless payments also provide us with access to an ever-growing range of online products and services. For example, we can shop on e-commerce platforms, order food delivery, book travel tickets, pay bills, and transfer money to friends and family with just a few taps.
Safety
Imagine you are on a vacation with your friends, taking in the sun on the beaches of Cox's Bazar. It is time for lunch, and the gang heads to the new café everyone has been raving about. It's your treat today, you order up a feast and everyone has a grand time. Time to pay – but oh no, what's this? Your wallet is missing! But you still have your phone, and you quickly call your bank's call centre to block all your cards, safeguarding your finances. The money that was in your wallet, however, does not quite have the same security features and is lost forever. Thankfully it is a minor setback – you do not carry much cash anyway. With a few taps on your phone, you quickly pay for the meal and head out.
The cash in your wallets is vulnerable to being lost, stolen, or damaged. It is also susceptible to counterfeiting. Cashless transactions, on the other hand, are protected by encryption, authentication, and verification technologies that help to make them more secure and easily traceable. By going cashless, people across Bangladesh can prevent the funding of illicit activities and instead, increase transparency and accountability across our economy.
Inclusion
Imagine you are flipping through the newspapers on a Friday morning during the month of Ramadan. A report on a small baby in Khulna catches your eye. She needs emergency treatment to save her life, but the family is destitute and needs financial support. You immediately make up your mind to contribute Zakat. You have cash, but time is of the essence, and it is impractical to send physical money to her parents 200 km away. Your banking or MFS app could literally save a life.
Embracing cashless payment modalities can have a substantial impact on closing the financial inclusion gap. According to reports, there are about 60 million unbanked adults in Bangladesh alone. Existing outside the banking sphere can prevent people from saving money, accessing credit, investing in education or healthcare, and participating in the digital economy.
Cashless payments can provide an alternative pathway for these individuals to access financial services through their mobile phones or devices. For example, mobile money platforms like bKash have enabled millions of people to send and receive money, pay bills, buy goods and services, and save money without having to visit a bank branch or use cash. This has had a significant positive impact on people and their economic opportunities and well-being.
Mobility in international travel
Imagine you have come to Paris on a work trip. Walking around the city on your free day, you come across a beautiful watch that you know your husband would love. It is your anniversary soon, and you don't mind splurging. But the cash dollars that you are carrying is not enough to cover your expenses in Paris and buy the watch. If only you had a dual currency credit card or a foreign currency debit card!
With so many countries around the world taking major steps towards a cashless world, Bangladesh must follow suit and keep pace. Visitors to Dubai, for example – where even fast-food vendors do not accept cash – will have a tough time if they do not have access to cashless payment services.
If we are quick to go cashless, we can use our cards to pay for various expenses overseas without exchanging currency or carrying cash. When travelling, we can also access online services that can help to enhance the travel experience.
Save big
Imagine you just got married and want to take your spouse for dinner at the best hotel in the city. But the cost of dinner for two people is too high. But it is your lucky day -- your credit card has a "buy one get one free" offer.
Cashless payments can help us save big by offering various benefits and incentives that can reduce our expenses and increase savings. For example, cashless payments can help us avoid fees and charges associated with cash transactions, such as ATM fees. Cashless payments can also facilitate access to a wide assortment of rewards or cashback offers from merchants or payment providers.
Cashless payments can also make it possible for consumers to improve their financial well-being and resilience by enabling them to manage their money more smartly and securely. For instance, a banking app can help consumers to track their spending and transactions through their mobile devices or online accounts and set budgets and goals.
Conclusion
We believe that cash and ATMs will lose relevance in the future. Bangladesh Bank has announced a vision to become cashless by 2027. In that pursuit, Standard Chartered intends to restrict access to ATMs only to the branches from next month.
However, if for unavoidable circumstances, there is a need for emergency cash, our clients will continue to have access to 10,000 ATMs of any banks with Visa electronic payments network at a cost of only BDT 15 per transaction, which is insignificant compared to the time, cost and energy to be saved to access our 20 offsite ATMs.
Going cashless is not a one-size-fits-all solution, but rather a process that requires collaboration and innovation across the board. A common criticism against digital payment is the additional cost, but cash is also not free. The government spends thousands of crores of taxpayers' money to print, store, transport, ensure security and bear other costs. Additionally, a cashless lifestyle saves cost, time and energy, while a cash-intensive economy helps to facilitate corruption, tax evasion, money laundering and extortions.
The author is Chief Executive Officer, Standard Chartered Bangladesh
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
