Five years from now, and you won’t see any dollar bills.
While the above statement is made-up, don’t be surprised if cash currency entirely disappears from the world. Mobile payments, cards, and contactless systems are taking over the transactional space. And with COVID-19 being an insult to injury, both buyers and sellers are ditching cash currency.
At the same time, the use of QR codes is on the rise. Economies worldwide are adopting QR code payments to fight the pandemic and enhance transitional efficiency.
Let’s discuss how QR codes can replace the age-old cash system.
The Problem with Cash Payments
Before getting into the ‘how,’ let’s talk about the ‘why.’ Why the traditional cash-based transaction system needs to be replaced? Physical currency has remained the primary mode of the transaction since the first human walked the earth.
So, why change a system that’s been successful since the Bronze Age?
Well, there are reasons, and they’re enormous. Let’s look into them.
1. You Can’t Create a Credit History
Though the first bank was established in 1492, the concept of credit history and credit scores came into play in 1989. This score is a collective indicator of how financially responsible you are. When you apply for a loan, the provider looks into your credit score and credit history.
When it comes to credit scoring, your payment history is the biggest indicator. But when you make most of your transactions with cash, you won’t be able to create a credit history. And a lack of credit history can affect your ability to secure loans.
2. The Risk of Assaults
Did you know that the leading causes of violent behavior and crime are poverty and resource scarcity? Simply put, money is the primary reason behind the majority of violent crimes.
When you carry a large amount of cash with you, you’re always at a risk of robbery or assault.
But when you don’t have any cash, the risk of suffering heavy damage during an assault decreases. Even if, by chance, you get robbed, the robber won’t find any money.
3. Difficult to Measure Expenses
Unless you’re maintaining an expense diary, keeping track of how you’re spending your cash is difficult. When you use digital payments, your payment history remains saved. You can check your payment history and determine your spending behavior anytime you want.
4. The Risk of Losing Money
Physical belongings are always at the risk of being lost or misplaced. What if you dropped your wallet? Or maybe you were carrying cash and a mobile phone in the same pocket, and the money slipped out when you were taking out your phone.
When you pay online, you don’t have to bear the risk of carrying physical cash. Even if, by chance, you drop your wallet, the loss you’d incur won’t be enormous.
The Rise of QR Code Payments as Cash Alternative
One thing’s for sure: the pandemic has taught the world to use QR codes in innovative ways. Before the pandemic, a QR code was nothing but a piece of cryptic design that Chinese people used to make payments. While it was certain that QR codes would thrive in the future, no one had thought they’d flourish at such a rapid pace.
Various countries are using QR code payments as a cash alternative. The country leading this change is, of course, China. The nation’s cashless policy played a pivotal role in helping it fight the coronavirus disease. The use of QR codes in all operations, from hospitals to banks, depleted human contact, and virus spread.
Similar trends are being observed in India. The adoption of QR codes in India goes back to 2017 when the National Payments Corporation of India launched Bharat QR.
Bharat QR is a common QR code system that supports united payments interface (UPI) capabilities. In essence, this led to the rise of interoperability of QR codes in India.
QR codes are also proving their mettle in Ghana. The Ghana Interbank Payment and Settlement Systems has partnered with HPS to launch a universal QR code platform. It will allow consumers to make payments from mobile wallets and cards by scanning the QR codes.