Should we skip cash as a payment method?
It’s been a while since someone said cash is king. Convenience is the new sheriff and we have launched a considerable amount of alternative payment methods only in the past years. In Sweden, where I live, cash is rare. Lowest use-rate in Europe. In fact, since we switched the look of our coins some years ago, I need to look twice to identify what is what. A lot of stores don’t allow cash as a payment method. Most bank offices skipped the service to handle cash years ago. For me, working in the fintech business, this is good news.
Or is it?
Let’s take one step back and reflect. Do we want to get rid of cash? Do we realize the consequences? Are we ready?
I don’t think so.
But why keep the cash in the ecosystem when I, in my profession address the magic of new, amazing payment methods, you might ask? Is it because older people find it hard to keep up? Nostalgia?
When I did my homework preparing this article, I found that it comes down to one thing — how big is our risk appetite?
Depending on who and where you are, “risk” means different things. The answer might also change if you think of yourself as a business owner or individual.
Situations, when cash comes handy, can be everything from:
- lack of power supply.
- problem with the network.
...to more severe matter like:
- You are in a situation where you’re bank (as you knew it) no longer exists.
- You are off grid.
Behind these bullets, I am sure you can, with some imagination, think of different situations. Some minor, some serious. Either way, I think we can agree that skip cash 100% might not be the right way to go.
So what should we do?
I think the biggest mistake that takes place in this discussion is that we think we have to choose. Okay, I am a Swede, and I love consensus, but this is beyond that. And I embrace a world where payments will be more and more integrated into the overall experience. Millennials and Gen Z will pick up the potential with IoT, machine learning, and 5G in ways we can’t even imagine. That’s all good. Can’t wait.
But we also need to provide a backup. When you think about it: every system has a backup, some several. You would never think about setting up let’s say, a business system without some backup or security. No, we add firewalls, detect and response and all kinds of protection to avoid a breach. Hopefully, we will never need them. But we add them anyway.
So in this context: who could imagine that we have the best second line backup system already invented, proven, comes with 100% uptime, ready to use if the other system fails.
So, next time I pick up a coin to check its value I will see a different kind of value.
Contact me if you need help to find the best payment solution. I will introduce you to some of our leading experts. They will give you the insight required, so you can identify a payment solution that increases your revenue and enables the customer experience. Now that’s what I call a win-win.
Hans Edin, CMO at Westpay AB.