by Hans Van Den Bosch, Global Sector Head Consumer Brands, Retail and Healthcare, Global Liquidity and Cash Management, HSBC
A cashless society is like a paperless office: often promised, but never quite achieved. Nevertheless, progress is being made in reducing cash transactions in the retail market, as major retailers explore new payment channels for their customers. However, as Hans Van Den Bosch, Global Sector Head, Consumer Brands, Retail & Healthcare, Global Liquidity and Cash Management at HSBC explains, a number of fundamental issues still need to be addressed to smooth the path to a cashless society.
While cashless payments have made progress in recent years, the quality of the underlying payment infrastructure and the capabilities of banks are delaying further progress. Irrespective of the interface used - cards, mobile phones, electronic wallets or any other method - a payment still has to be moved. This transfer of value is immediate with physical cash: a note or coin is handed over in exchange for merchandise or a service. The transfer of value may not be so immediate with other payment methods: much depends upon the infrastructure that actually moves the funds. In some countries, electronic payment systems are now available that can transfer funds in real or near real time (often referred to as ‘instant payment systems’), but elsewhere this process may take anything from overnight to several days. The good news is that this situation is gradually improving, with a growing number of countries committing to, or already building, instant payment systems.