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According to a recent report by Citi, cash is slowly but steadily on its way out. At the same time, questions are being raised on why we should not accelerate the transition as much as possible. Converting payments to digital helps with transparency, and reduces both social and other labor costs on the overall system.
No doubt the benefits are many:
Some of the above – such as the credit profile – we could probably achieve with cash as well. But it’s far more convenient with digital.
Why then is cash still going strong? Almost all studies including this often quoted one by Federal Reserve Bank of San Francisco point to cash being the dominant form of payments for low value transactions, even in advanced economies like the US. When we analyze the reasons, we often look at demographic such as income and age groups, acceptance of cards, reliability of digital instruments etc. The following might be indications of a wave of innovation that's yet to come:
Taken together, these reasons could be signaling the foundation for the next innovation frontier in payments, and something that the emerging Fintech economy is definitely encouraging.
Is a big innovation cycle be in the making? This next phase will be fueled by mobile and advice based ecosystems which are personalized for maximum context through the use of analytics. The incumbent players have the potential to take their relationship with the customer one step further. It might also mean that the disruptors of recent times will themselves be disrupted as the model shifts again!
What do you think?
Photo credit: GotCredit via Foter.com / CC BY
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Jelle Van Schaick Head of Marketing at Intergiro
07 October
Kuldeep Shrimali Consulting Partner at Tata Consultancy Services
Nikunj Gundaniya Product manager at Digipay.guru
Ritesh Jain Founder at Infynit / Former COO HSBC
04 October
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