March 9, 2023
DHAKA – The disappearance of cash – and the world’s eventual adoption of digital payments – is a concept that has been around ever since electronic fund transfers were conceived in the 1960s. The creation of internet and other advances in subsequent decades only cemented the idea that this transition was inevitable.
In Bangladesh, the idea of a cashless society has recently taken root. Recent headwinds have transformed the way we handle money, spurred rapid innovation and resulted in habits oriented around convenience, safety and sustainability.
In line with government aspirations, banks and financial institutions have committed themselves to promoting easy, safe, and secure cashless transactions for all. Card offerings, easy-to-use online services, and best-in-class mobile applications have been introduced and revamped to suit newly minted purchasing habits. This diverse range of options gives customers the flexibility to choose what truly fits best.
The convenience of going cashless is multi-layered. For example, e-commerce has opened eyes to entirely new conveniences. With the click of a button, ordering and payment becomes a streamlined activity – one that negates the need to carry cash. This saves time, minimises cash management efforts and eliminates the risk of misplacing cash.
Going cashless empowers individuals to do things at their own pace. Recent innovations have made it possible for customers to view account balances, transfer money, and even apply for loans with convenience and speed. With these tools, individuals can conduct a large swathe of financial transactions without leaving home.
The safety associated with going cashless is two-fold.
First, cashless payment solutions boost hygiene by limiting the handling of cash. The second dimension of safety comes in the form of greater security. Most forms of cashless payment leave a digital record of when, where and what is purchased, making it easier to prevent theft.
Carrying little to no cash can also save customers from becoming victims of financial crimes. Encrypted payment systems and portals that have been secured with multi-factor authentication protect customer accounts from fraudsters. Newly introduced biometric technologies, like facial recognition and fingerprint scanning, ensure that only authorised users have access to accounts.
The environmental impact of traditional cash-based transactions is often overlooked. The use of digital payments reduces the need for paper-based transactions, which, in turn, limit paper waste generation.
According to a report by the World Wildlife Fund, the production of paper currency has a significant impact on the environment. The report estimates that the production of one note requires 1.2 litres of water and generates 0.02 grammes of carbon dioxide.
The transportation of cash also involves fuel-powered vehicles, which contribute to air pollution. So, the use of cashless systems actually enables customers to reduce their individual carbon footprint while contributing to the collective need to accelerate sustainability.
The future of our economy – of a cashless society – is already starting to take shape. Cash transactions at our branches have gone down by almost half between 2019 and 2022.
Initiatives spearheaded by the central bank, such as Bangla QR, facilitate cashless payments for small traders, while Binimoy, an interoperable digital transaction platform, will bring synergy to financial systems.
In a fast-developing ecosystem, the aspiration of a digital economy is inching closer and closer. As new and creative ways to exchange money are being innovated, the need to pull out our wallets might soon become a thing of the past.
The author is the head of consumer, private and business banking at Standard Chartered Bangladesh