We've all heard "cash is king," but is it?
In 2023, many are starting to say "not so much."
Cashless payments are changing the way we shop. Just last year, shoppers spent more than $13 billion using cashless payment methods, and in the next several years, spending this way is expected to double.
“Smartphones really changed the game here,” said Ted Jenkin, CEO of Oxygen Financial. “In some ways, they're replacing credit cards altogether.”
But it's not just online shopping using apps like Apple Pay, Venmo, and CashApp; technology is also creating cashless shopping and buying experiences in person.
“And so we built the product around that sort of enduring truth that people don't like standing in line,” said John Jenkins.
Jenkins is the vice president of Just Walk Out Technology at Amazon. The tech giant first used the system in its own Amazon Fresh stores, where you tap your mobile wallet or credit card at the gate to get in and pay.
“There's cameras on the ceiling that watch what you're putting on, taking off the shelf, or putting back on the shelf,” said Jenkins. “And then when you walk out the exit gate of the store, it bills you for the things that you took off the shelf and left the store with.”
This technology is now being used at university stores, stadiums, and airports across the country.
“So a good example would be at Lumen Field, where the Seahawks play. Here in Seattle, they saw a 60% increase in traffic, and the sales doubled at that store after they deployed just walk-out technology,” said Jenkins.
And demand is only expected to skyrocket.
How is the role of cash evolving?
Digital banking is on the rise. About 197 million people used it in 2021 and that number increased to 203 million in 2022.
A study by Price Waterhouse Cooper estimates that by 2025, we will see a 42% increase in global cashless payments—the study says Asia is adopting the technology faster. Cashless payments are estimated to grow by 109% by 2025.
But the study by PWC Research shows people aren't all in yet.
48% of the people surveyed said that in the next 5 years, they are most concerned about regulation for privacy and data safety around cashless payments.
“I think there's a real concern, and a valid concern, for people over time over their privacy, like what data can people collect, and what can they not collect,” said Jenkin.
Jenkin says that as far as privacy concerns go, it's necessary to keep your data protected with 2-factor authentication and strong passwords. Is necessary, but you shouldn't be afraid to try out cashless shopping experiences.
“There are some people that are worried about giving information to the government, but I have news for everybody. They know almost everything already,” said Jenkin. “And it's hard to transact yourself in society unless you do give away that information today.”
Some warn, though, that a cashless society could adversely affect the poor, who may not have access to technology or banking accounts.
Places including Washington, D.C., and Detroit have passed laws requiring businesses to accept paper money.
Jenkins, though, says the upsides can outweigh the concerns.
He says this technology can help reduce retail theft, and it frees up employees to help customers on the floor.
“We're not trying to create a human-less, robot-oriented world,” said Jenkins. “We want to create a more engaging kind of physical retail environment where there's like a more meaningful connection between the employees of the store and the people shopping.”
But this is something that's inevitable.
“Over the next 5 to 10 years, most of the mom and pops will have to adopt this technology,” said Jenkin. “But I think we're probably 20 years away from being a cashless society. We're probably five years away from seeing biometrics being in a lot of stores where you shop.”
