Contactless Economy: The Factors Behind the Rise of Digital Transactions

When is the last time you’ve used cash? I guess this answer depends on the country you live in. In some countries, accepting cash isn’t even an option. Why? Well, it has become a lot harder to handle cash for both businesses and customers.

First of all, businesses need to keep money for change, which increases the risk of robberies, and they also need to physically move the money into a bank. Customers on the other hand need to carry cash or look for an ATM (which can have expensive fees) just to be able to pay.

Instead, you have digital or card contactless payments where you keep your bank details digitally and you tap the card or your phone to pay. A lot simpler and easier solution, don’t you think?

So, the answer to the question of why people prefer digital payments becomes clearer, but let’s dive into the industry deeper and try to understand people’s habits better.

Convenience is King

The biggest and most obvious reason that people prefer digital payments is convenience. It is a simple, and a lot easier solution. Plus, you don’t have to worry about that loose change that ends up in your washing machine (now that needs to be repaired).

Now, people have access to digital wallets like Apple and Google Wallet, or they can even scan a QR code on their phone and make transactions all through their phone in minutes.

Let’s face it: we love convenience. Imagine standing in line at a grocery store and rummaging around for loose change. Or worse, realizing you left your wallet at home. Enter digital payments. Whether it’s through mobile wallets like Apple Pay, Google Wallet, or even a simple QR code, paying with your phone has become as natural as checking Instagram while bored.

It is a lot simpler, which is why in 2022, 89% of all transactions were digital, and this number will continue to grow until eventually we hit all digital payments, and that’s going to happen really soon. Goodbye cash!

Also, we have to consider international transactions. We live in a digitalized world where we make international transactions every day, and sometimes without even noticing. These wouldn’t be possible without digital payments.

Plus, digital payment platforms like Genome allow us to track, keep, receive, and pay with multiple currencies, which means lower fees and better diversification.

Click here to learn more about Genome.

Safety and Security

Like it or not, the world is a sketchy place, but somehow digital payments bring a little peace of mind. Yes, cybercrime is rising, but it is still an upgrade of the cash process where we have to physically hold money (risk of robberies), and nobody can help you with the refund if you pay cash.

With digital payments? If you are not satisfied with your purchase, you can request a refund through digital payment processors, and they will give you your money back eventually.

Plus, security is constantly improving. We now have two-factor authentication, face recognition, Biometric authentication, code generators, and whatnot. All of these things make the entire process feel safer.

The Pandemic Effect

Yes, we have to remember the dark times (COVID-19) when we were all stuck. But these dark times also brought something good. We are talking about digitalization.

Since we were all stuck at home many people ditched their old payment methods and went digital. Of course, this trend continued after the pandemic.

Faster Transactions, Faster Lives

We’re living in the era of speed. Fast food, fast fashion, and now—fast payments. With digital payments, transactions are completed in the blink of an eye. No more waiting for your card to process or your bank to approve a transfer. Digital payments cut through the red tape. And for businesses, this means getting paid quicker, especially in the gig economy.

But it’s not just gig workers benefiting. Think about the “Buy Now, Pay Later” (BNPL) option. Ever wanted to buy something but were short on cash? BNPL allows you to pay in installments, and it’s becoming increasingly popular.

By 2026, the BNPL market is expected to grow by 20% annually, and we’ve all probably taken advantage of that at least once (no shame!).​

What About Businesses?

If you run a business, embracing digital payments is almost non-negotiable now. Customers expect it, and not offering it can mean lost sales. Plus, businesses get to enjoy faster payment processing and potentially lower transaction fees compared to handling physical cash or checks. Some companies are even creating their own branded payment systems to offer a personalized experience and reduce churn.​

So, if you’re running a business and you’re still stuck on cash or manual card swipes, it might be time to rethink your strategy.

Why People Are Ditching Cash:

• Speed and efficiency: No more waiting for change or for the card machine to spit out a receipt.
• Security: Biometric authentication and encryption make it harder for fraudsters to pull a fast one.
• Contactless: The pandemic made us all a little wary of touching anything unnecessarily.
• Convenience: Your phone is your new wallet, and let’s be honest—you’re never leaving the house without it.

But What About the Skeptics?

Sure, not everyone’s sold on digital payments. Some people still cling to cash because of privacy concerns or a sense of control (ever feel like swiping your card means spending invisible money?). And there’s always the fear of tech glitches or system outages. However, even for the skeptics, digital payments are becoming hard to avoid as the world moves towards a more cashless society.