Thanks to the rise of financial technologies or “fintech”, the global economy is moving towards a “cashless” society. The Philippines is no different; right now, we have digital money platforms that give us the opportunity to transact on a cashless basis.
But why should we move towards cashless transactions? What are the advantages and disadvantages of going “cashless’? In this article, we try to answer these questions.
What is “cashless”?
When we say “cashless” we don’t mean having no cash at all, it simply means purchasing goods and services without using physical cash.
In a cashless economy, physical money is turned into digital currency and stored in your digital wallet. Digital wallets are often apps in phones and can be used to pay in stores that allow cashless payments. Cash is transferred from one digital wallet to another through scanning of QR codes or initiating a transfer through the digital money platform.
Advantages of going cashless:
1. Convenience
One of the biggest advantages of using cashless platforms is the convenience it provides. Through cashless platforms, users don’t need to carry physical cash on their pockets — all they need is their phones.
Having a debit card also offers this kind of convenience, but debit card holders can’t monitor their balance in real time. With digital money platforms, users can track their transactions as they happen. This allows them to budget on the go and ensure that they aren’t over spending.
2. Investment Opportunities
If you’re looking for a way to make your money grow instead of sleep in the bank, digital money platforms can help you. Some digital money platforms in the Philippines have an investment option, giving users access to different kinds of financial instruments.
Some digital money platforms also offer higher interests per annum than savings accounts in the bank. So you can ease the impact of inflation over your money by keeping it in a digital money platform.
Disadvantages of going cashless:
1. Cyber Security
Like any other application running on the internet, there’s a cyber security threat that comes with using digital money platforms.
Hackers and cyber criminals are known to target digital money platforms for data on users, and to steal digital money. If developers of digital money platforms fail to keep their platforms secure and up to date with the latest cyber security standards, it could end up as a data privacy and financial disaster for all their users
2. App Maintenance
Digital money platforms need constant maintenance to ensure that the application runs smoothly and efficiently. This means that there will be times when users won’t be able to access their money or have discrepancy on their balances.
These events can cause major anxiety for users, especially if there is a large amount of money on their digital wallets. Some maintenance can last only a few hours, but major app updates could run for days leaving many users without usable cash
Here is the FinTech App that I use:
- GCash
- CoinsPh
Conclusion
Digital money platforms are in its early stages, but many countries are seeing the potential and are moving towards a cashless society. For young adults trying to save and grow their money, there’s a big advantage in using digital money platforms. But remember that nothing is ever perfect.
