Moving Towards a Cashless Society

ZOTTO LTd. (“ZOTTO”) is a UK based Fintech company privately owned. ZOTTO , provides business accounts, payments solutions and automation to medium and small businesses. ZOTTO is registered in United Kingdoms as a payment’s services institution according to UK law and regulations and approved by the FCA. ZOTTO  is regulated by FCA .

Cash Was King

For almost as long as there have been civilisations, there has been a need to pay for goods. Today we take it for granted, but things have not always been this way, and thousands of years ago ancient people bartered for goods and food, swapping items of need or value to obtain the items they were after. Money, as we understand it today, where a physical item is used to represent a currency value, first appeared as far back as 1100 BC in China, where bronze castings of miniature tools were used as currency. This early example was swapped for round objects, again bronze, quite quickly as people kept hurting themselves with the sharp tools.

From there, the first example of a minted coin as we recognize them today was in 600 BCE, and they used different animal shapes pressed into the surface to determine the denomination. Money has varied since in terms of the metal used and so on, but apart from the introduction of paper money, again in China around a thousand years ago, money remained largely unchanged until the introduction of the credit card in 1946.

Banker John Biggins invented that card, called the Charg-It, although it took a while for the idea to catch on. The first credit card issued in the UK was by Barclays Bank in 1966, 20 years later. Since then, cards evolved, with debit cards that took money directly from your bank account, to virtual cards and phone payment systems. Now, with virtual money, the path is set for an inevitable cashless society, and the ongoing Covid-19 pandemic is only accelerating that change.

Real or Virtual?

As money has become more and more digitized over the years, we have shifted from a system known as the gold standard, where every penny in circulation was backed by an equivalent amount of gold stored in the central bank, to a leveraged system that means there is more digital money in existence than there are physical coins and notes. Where once your debit card spent money in your account digitally, but was backed by physical cash at the bank, today, that money is entirely digital, with physical currency only on offer if you visit the bank to ask for it.

For consumers and retailers, there have been significant advantages emerging from this shift to digital and ultimately a cashless society. The most obvious benefit is security, for a consumer carrying a large amount of cash was risky, with robbery a distinct possibility. With cards accessed via a pin number or phones accessed via fingerprint or face recognition, today’s consumers can gain digital access to large amounts of money without ever risking theft in the same way.

When consumers have all their money accessible all the time, as they can with virtual funds, purchases cease to be complex. There is no need to think about card balances or how much cash you have on hand, the ability to buy what you want instantly is always there. With virtual currency, consumers always have the right money with them too, no more searching pockets to find the right change, and of course, we live in a global world, virtual currency is much easier to spend abroad than having to exchange physical cash at every border.

For retailers, the benefits are even greater. The same security concerns feature here too, with digital transactions meaning no need for a safe and leaving large sums on the premises overnight. It makes an end to the bank run too, where the owner or employee took that money to physically deposit it at the bank. Not only was this also a security risk that has been eliminated, but it was a time-consuming process too.

China is the first country in the world to release an entirely digital currency, the Digital Yuan, which is not a cryptocurrency, but a Bank of China issued currency that runs alongside the traditional Yuan, it simply has no physical coins or noted, it is entirely digital. This opens the door to the cashless society, and with the need for distancing and so on during a pandemic, removes some of the issues with physical currency in terms of health and safety.

Why Does it Matter?

As we accelerate towards a cashless society, retailers often wonder why does it matter to me? We have discussed the advantages of card payments for both consumers and retailers with the lowering of security risks, time and costs. Cashless makes things even easier, not just with consumers. A cashless payment system can operate directly through a phone or smart card, meaning just a fingerprint or even face detection will authorize and instant payment. This is less hassle for retailers when taking payments, but there are other benefits too. Making payments is just as easy, so employee’s wages are all instantly distributed, the same with suppliers. Payments take seconds to make, and because you pay directly to suppliers and so on, it reduces costs and increases security.

Wider Society Benefits Too

Virtual cash also offers some significant advantages to society itself, including governments. With enhanced accountability virtual cash will deliver a reduction in tax evasion, but also make fraud much harder to carry out too, protecting consumers from many of the scams they fall victim to in increasing numbers today.

It is also a valuable weapon in the fight against modern slavery, helping to reduce and eventually eliminate exploitation and other social issues that are fuelled by our current monetary framework.

Bringing Cashless into Your Business

All of that sounds great, but as with anything involving technology, many businesses will be wondering how they can be a part of that. Large organizations have the funds and in-house skills to ensure they are at the forefront of the cashless movement, but smaller companies can be left behind.

However, with companies like Zotto introducing turnkey solutions for those smaller businesses, cashless technology is not beyond the reach of any budget. Their CRP solutions are built for cashless, incorporating easily implemented APIs that bring the technology within reach. Integrating payments into the existing customer, stock, supplier and employee management solution means that payments, both incoming and outgoing, can be seamlessly integrated into daily operations. Connect directly to suppliers and other merchants, pay invoices as part of the stock control process, all from within a single interface. This reduces management time, letting business owners focus on growing their sales instead of dealing with paperwork.

As Covid-19 continues to disrupt the world around us, the move to a cashless way of living accelerates, but with the right tools, such as 3CRP from Zotto, retailers of every size can take full advantage and be at the forefront of the cashless movement.

 

Written by : Faridoon Qazi