Digital payments ‘will replace cash by 2030’
Written by Hannah McGrath
Financial services professionals are preparing for cash to stop being the preferred method of payments for the majority of consumers by 2030.
A poll of 129 financial services professionals by EY at the SIBOS conference unanimously (96 per cent) agreed that cash will be replaced by digital payments methods by the end of the next decade, with 59 per cent believing mobile payments will be the most common.
Meanwhile, 31 per cent said they would choose biometrics - including facial recognition, fingerprinting and retinal scanning - as the dominant payment method by 2030.
It also revealed that that while respondents believe a cashless society can provide benefits, such as improved convenience (39 per cent) and financial crime prevention (36 per cent), concerns remain over financial inclusion, data security and privacy.
All financial services professionals based in Asia, the Middle East, Africa, Latin America and Australasia cited social exclusion as the most negative by-product of a cashless society.
In addition, a majority of respondents (52 per cent) believe that financial institutions can do more to reassure consumers that their data is protected through increased investment in cyber security protocols.
Other areas of concern included increased potential for cyber risk (20 per cent), potential for mass outages (20 per cent), greater government control (14 per cent) and costs faced by the business sector (eight per cent).
More than a third (36 per cent) of respondents believed the most effective way to achieve a cashless economy will come via consumer buy-in to apps, cards and biometric devices that make it possible.
Survey participants based in Asia stated that industry bodies and governments (36 per cent) should address concerns around trust and security, as well as regulate the practices of non-banks such as peer-to-peer (P2P) lenders and cryptocurrency traders.
On the other hand, the majority (45 per cent) of European-based respondents said consumer adoption was the most important factor, hinting that while greater options may become available via Open Banking, the responsibility will rest on the public to embrace new forms of payments.
Jan Bellens, EY’s global banking and capital markets sector leader, said: “As we enter this new monetary world, financial institutions play an integral role in the protection of personal financial data.
“Investing in greater cybersecurity measures and educating consumers on the safe use of digital payments will help build the trust necessary for more widespread adoption of cashless payment options.”