Are we finally on the brink of becoming a cashless society?

Over the past 15 years, the digital revolution has slowly eroded our society’s attachment to the tangible. Despite being initially plagued by security fears and a lack of public confidence, millions of us now make digital payments on a daily basis. Psychologies have shifted and technologies have evolved, but could we ever become a completely cashless society?

Visa sticks NFC into a microSD card by Tom Purves - edited

New Devices and Shifting Attitudes

People have been making retail purchases with credit and debit cards – and shopping online – for decades. The only time that many of us are still reliant on cash is when dealing with very small independent traders, or settling up between friends.

Now, with the rapid pace of smartphone adoption, leading a cashless life is becoming easier and more convenient than ever before. New mobile and contactless payment methods look set to challenge many of cash’s remaining selling points, helping buyers to make quick, easy, cashless payments to anyone they like; Gartner predicts that the mobile transaction market will be worth $617 billion by 2016, with 448 million users.

NFC – A key technology

Near Field Communication (NFC), which enables quick, wireless exchanges of information between nearby devices, could prove a key technology in the shift to a cashless society. Customers can make instant payments to retailers by swiping their NFC-enabled devices over a terminal at the point of sale.

Many smartphones and tablets are already equipped with NFC – in 2012, the number of NFC-enabled devices exceeded 100 million, with 5 billion wireless connectivity chips set to ship by then end of 2013.

NFC’s applications extend far beyond enabling contactless payment, a fact which may help the case for its adoption. Already, retailers are finding more and more creative ways to use the technology to enhance customer experiences. The ability to interact with items in-store and personalise shopping experiences looks set to increase the role that NFC plays in all stages of the buying process.

NFC – Probably A key technology

While TSYS predicts 50% of all POS terminals will be contactless/NFC capable by 2016, it’s not yet clear if consumer demand is really strong enough to make NFC-aided transactions the norm. In Japan, phones containing contactless connectivity chips have been in the majority for years, yet adoption has remained low, with only 15% of owners making use of the functionality.

The growth of payment by NFC is hindered by a catch-22 situation. Retailers are hesitant to invest in any new technology without being sure that their customers are excited to use it, while customers might be keener to use their NFC-enabled devices if a wider range of retailers supported them.

If payment by NFC stalls, we may well see competing payment solutions emerge that directly respond to changing customer needs.


With ultra-convenient, cashless payment options increasingly available to us, it is easy to view cash as an archaic notion, coming to the end of its natural life. And that may well be – but it’s likely to take a few more years of adjusting attitudes, a couple more “killer apps”, and maybe even some new technologies to put the final nails in its coffin.

Header image adapted from “Visa sticks NFC into a microSD card” by Tom Purves under a Creative Commons Attribution 2.0 Generic license.

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