There is a constant debate on whether global economies should continue to offer cash payments or go cashless by converting solely to digital.
Critics say this move would disenfranchise unbanked, cash-dependent consumers and does not drive financial inclusion, while others claim that a failure to go cashless limits innovation in the fintech sector. But what if the best solution lies somewhere in the middle?
Cash and digital payments don’t have to be mutually exclusive; this is not a zero-sum game as the two payment options can exist together. According to new PPRO data, over half of U.S. and UK consumers will stop the checkout process if it is too complicated or their preferred methods are not available. Consumers prefer having multiple payment options, whether it be using a bank transfer, a credit card, a mobile wallet or even cash. Payment flexibility is a crucial factor in offering a seamless checkout experience. Some shoppers never carry cash, while others view cash as the only way they want – or are able – to pay.
The key is for merchants to offer a personalized experience for each and every consumer.
Despite a seemingly rapid shift towards digital payment methods, cash is not going anywhere. Many regions are tied to cash-based payments. For example, in
This local payment method is innovating how consumers pay, meeting their needs and ensuring financial inclusion. Removing cash vouchers would not only limit access to e-commerce but also eliminate a fourth of the addressable LATAM market for retailers. Further,
Cash is often preferred for a plethora of reasons: It can be easier to use cash for smaller purchases, older consumers may be wary of digital payment methods, and avoiding credit can help shoppers stay within budget. This past year, Philadelphia recently became the
Financial inclusion is not just limited to offering cash payments. Each region has its own nuances that influence consumer payment preferences. Consumers want to pay with the payment methods they are comfortable with; a majority of online shoppers will abandon their cart and purchase items on another site if they aren’t offered their preferred way to pay.
Local payment methods serve as the bridge to connect shoppers with merchants across the globe.
A great example of this is
Payment methods need to enhance the consumer shopping experience, and a combination of cash and digital payments is a way to do so. In some cases, the lines between cash and digital payments start to blur. In Argentina, Mexico and Brazil, cash-based payment methods like RapiPago, Oxxo and Boleto Bancario give many cash-dependent consumers a chance to shop online. Cash will continue to complement many digital payment methods, not restrict them.
The key is for merchants to understand the factors driving consumer behaviors around the world and offer the specific local payment methods their target customer prefers. In some cases, this is cash and in others it's a digital method. Having a choice is what will not only drive inclusion but also increase sales around the globe. Innovation does not necessarily mean cashless, but rather the industry creating solutions to solve consumer needs.