What Does The Future Of Money Look Like When The World Is Going Digital?
76% of Americans who carry cash have less than $50 on them, but they’re often not even spending it, preferring digital payments instead. Younger generations handle money less than ever; getting a bank account from a young age to shop online and using a simple tap of a card or their phone to make a payment in stores is the norm. As the financial world goes digital, it’s transforming the future of money management and how people shop and make transactions.
Do banks have a future?
In the past, having a good relationship with staff at your local bank was almost essential. It was somewhere to go for advice on all things financial, as well as to open up new accounts, take out loans and get a mortgage. Today, all of these things can be done online, and while this likely means the end of banks as we know them, it doesn’t mean they won’t still be relevant in the future. Banks need to adapt with technology, but it’s important to focus on the customer service they can offer, which chatbots and smartphone apps won’t be able to top. Many people, even younger generations, still like to know the bank is there for one-to-one advice, help with their accounts, or personalized information regarding big financial decisions.
Payments without cash
There are very few transactions that require cash anymore, but some small businesses still accept cash only. The truth is that these businesses are likely to lose customers, rather than people getting cash out to shop there. Places that are ‘card only’ are starting to appear, showing how quickly things have changed in such a short time. Making payments with smartphones and contactless cards is becoming the new norm, plus it also offers additional security, as phones commonly use facial recognition or fingerprints to unlock, and banks can quickly pick up unusual activity on cards.
Environmental issues are a hot topic at the moment, and rightfully so. Money going digital can be beneficial for the environment due to the resources needed to produce it, such as mining, smelting, minting and transportation. Additionally, manufacturing money costs money. In 2018, the US Mint produced over 8.4 billion pennies, totaling $69 million in losses, as it costs more to manufacture them than what they’re worth, and this is before the additional environmental impacts are factored in. Going digital can help to save a huge amount of money, as well as reduce the impact on the planet.
The way money is used is changing very quickly, and it’s only a matter of time before it goes fully digital. It’s inevitable that banks will have to change how they do business to keep customers using their services as younger generations are driving the industry, but it’s clear that they will still play a vital role in society.