• Home
• /
• Business Technology Review

Vision of A Cashless Societies – Possibility Or A Myth?

Kunal Jhunjhunwala, Founder, Airpay, says shift towards digital currency opens doors to financial inclusion, supercharging the economies of many nations

THE VISION of a cashless society, long sought after by governments and businesses worldwide, represents the pinnacle of modern financial systems. While attaining absolute perfection in this regard may be unattainable, the pursuit of transitioning towards a less-cash society is a crucial step in this direction. Throughout history, physical currency provided a tangible sense of security, but it came with inherent risks such as theft, wear and tear, counterfeiting, and a lack of transparency. As societies evolve, the limitations of physical cash, particularly its limited volume for carrying or traveling, have become increasingly evident.

The digitisation of currency marked a transformative leap, akin to the transition from gold coins to paper money. In this process, digitized money successfully addressed many longstanding issues, including enhancing convenience and accountability. This shift towards digital currency also opened doors to financial inclusion, supercharging the economies of many nations.

Africa and India serve as prime examples of successful transitions towards digital payments. Africa, driven by telecom companies, established itself as a large-scale laboratory for digital payments. This effort generated invaluable data that facilitated financial access and inclusion. India, on the other hand, witnessed a cashless revolution triggered by the government's decision in November 2016. The participation of banks and fintech companies further enriched this transformation. The adoption of the JAM trinity (Jan-Dhan, Aadhaar, and Mobile) and the evolution of the Unified Payments Interface (UPI) played pivotal roles in this remarkable journey. Today, both India and Africa have made significant strides in building digital, less-cash frameworks supported by robust technological infrastructures and unwavering government commitment.

Mena region, globally recognised as a hub for banking, began their journey towards a less-cash society relatively late, notably after witnessing India's successful strides. Paradoxically, this delayed adoption worked to their advantage. They could implement changes swiftly without the need to reinvent the wheel or grapple with the teething problems often encountered by early adopters. Mena’s unique position, characterised by the presence of global banks and conglomerates, along with substantial outward remittance potential, has propelled the dream of a cashless society forward.

The next logical step in this journey is the consolidation and enhancement of B2C, C2C, C2G and G2C payment infrastructures. A diverse range of technologies, including QR codes, blockchain payments, digital wallets, and prepaid cards, has already begun reshaping the payments landscape. A dynamic mix of ever-available payment solutions is poised to empower consumer behaviour at the ground level. However, inducing behavioural change can only be achieved if the process is both seamless and secure to maintain consumer trust.

Incentivisation plays a pivotal role in driving the adoption of digital payments. Encouraging customers to transition from traditional cash transactions to digital alternatives involves both disincentivising cash payments and rewarding digital adoption. Governments across GCC have recognised the importance of this incentive-based approach. They have made significant investments in fostering a collaborative ecosystem that supports and accelerates the shift towards digital payments.

It is essential to acknowledge that the path to a less-cash economy is an ongoing journey. Persistence and unwavering focus are essential in navigating the complexities of this transition with continuous adaptation and learning. The Mena region, is well-positioned to advance towards the realisation of cashless societies and instant payments, contributing to the global evolution of modern finance.