Which Countries are Closest to Cashless Societies?

April 13, 2015     By : Ray

There are several reasons not to like cash, but ours remains a cash-based world. Consider the journey towards a cashless world: it is like a gradual trek toward electronic payments shaped by local factors. Cash accounts for about 85% of global consumer transactions. This remains true even as much of the world’s population is gaining access to a multitude of non-cash options for making payments.

Each of the following countries is an illustration that a true cashless society is indeed possible and that once the relative barriers are eliminated, any country can rapidly switch to cashless payment methodologies. Here are the top countries currently part of the expanding cashless world:

Belgium

Noncash payments’ share of total value of consumer payments: 93%

Percent of population with a debit card: 86%

Belgium has clearly become one of the most advanced countries in the cashless world. The nation’s government has given a high priority to making payment systems more efficient. A majority of the population in the country is urban and has a high level of access to financial services, modern infrastructure and latest technologies. An interesting fact to be noted is that the Belgian government has imposed a limit on cash payments limiting it to 3000 euros. There are many instances of revolutionary payment propositions in Belgium. A new mobile payments venture was recently launched in Belgium dubbed as “Sixdots”. Available as a mobile app for iOS and Android users, it allows users to set up digital payments wallets. These wallets are supported by Belgian banks and the mobile operator Proximus.

France

Noncash payments’ share of total value of consumer payments: 92%

Percent of population with a debit card: 69%

France’s success in moving away from cash comes in part from its high level of banked population (97%) and also from a long-standing government focus on the efficiency and financial inclusion aspects of payments. France has been actively focused on payments innovation, bringing to market new solutions such as mobile payments, contactless cards, and m-POS to meet the diverse payment needs of French consumers. On February 13th, 2014, Visa Europe and Orange announced the commercial launch of Orange Cash in Strasbourg and Caen. These two cities are considered to have the highest usage of contactless payments in France. This launch made Orange the first mobile network operator in France to offer contactless mobile payments to its customers.

Canada

Noncash payments’ share of total value of consumer payments: 90%

Percent of population with a debit card: 88%

Canada has shown a high level of progress as highlighted by its nearly comprehensive financial inclusion (96% of Canadians aged 15 and over have a bank account) and a long-standing government focus on optimizing national payments systems. Much of the nation’s success in cashless initiatives can be attributed to early adoption of debit card POS usage, and the early, rapid uptake of MasterCard PayPass, which has opened up the category for other networks’ NFC-enabled low value payment solutions. In Canada, 78.1% merchants have adopted POS systems, and there are about 2.13 POS per merchant store in the country. The market size of mobile POS and contactless POS are growing at rates of 9.2% and 16.4% respectively.

United Kingdom

Noncash payments’ share of total value of consumer payments: 89%

Percent of population with a debit card: 88%

UK is typically seeing cash used for low value retail purchases, and even these are being targeted with new solutions like PayPass. Very few locations in UK remain where cash is the only means of payment, and new access points are coming up where consumers can use contactless cards, like on toll roads and transport, as there is greater consumer interest in such solutions. In UK, there are 1,326,333 POS terminals, and within that base, the mPOS and contactless POS markets are growing at rates of 14.3% and 26.7% respectively. UK’s popular mobile payment system. Paym. has crossed 26 million pounds in transaction volume. Two thirds (66%) of the UK population is aware of mobile payments, with more than half (52%) of those with knowledge of mobile payments aware of Paym.

Sweden

Noncash payments’ share of total value of consumer payments: 89%

Percent of population with a debit card: 96%

The country has witnessed broad usage of debit cards for retail payments. Further movement away from cash continues to come slowly through erosion of cash share of low value payments, through uptake of products like PayPass and emerging solutions for transit payments using smartphone applications. As Sweden has long set out to reduce cash usage, Swedish governments have strived to make electronic payments available, affordable and ubiquitous. Contactless payments represent a €9.5 billion opportunity in Sweden. Top Swedish mobile operators such as Telia, Tele2, Telenor and Three had launched WyWallet, a mobile payments offering that provides mobile wallet services to 97% of Swedish mobile phone users and includes support for NFC.

Australia

Noncash payments’ share of total value of consumer payments: 86%

Percent of population with a debit card: 79%

In Australia, efforts are being taken to reduce the share of cash for low value transactions. Payments networks in Australia including MasterCard and EFTPOS have recently introduced new pricing regimes designed to capture a greater number of low value payments, and efforts are now being made to improve acceptance of low value payment solutions across the country. Australians are favoring contactless payments day-by-day, ditching traditional payment methods. Even merchants are seeing a high demand and are rolling out specialized terminals to cope up with the trend. More than 58 million Visa PayWave payments were made in July alone last year. In Australia, mobile-based contactless payments have accounted for 60% of all debit-card transactions in a 12 month period starting November 2013.

The Netherlands

Noncash payments’ share of total value of consumer payments: 85%

Percent of population with a debit card: 98%

The number of cashless or ‘cards only’ registers in Dutch supermarkets have increased significantly over the past few years. In part, this growth came as a result of the national Hotspot Project that began in early 2012 by the Foundation for Promoting Efficient Payments (SBEB). The goal of the initiative was to increase safety and convenience for consumers in stores that accept debit cards. Last year, shoppers used direct debit cards to buy goods and services over 2.9 billion times. Scan-only payments are also witnessing considerable growth and accounted for 8.3 million sales last year.

(Source: MasterCard Advisors’ “Cashless Journey”, CNBC)

Now experience the full power of the LTP knowledgebase on this and all other FinTech topics. MEDICI, now in beta, is the discovery and engagement platform for FinTech startup research. Register here and find out if your company has already been profiled at medici.letstalkpayments.com


Ray

Ray has keen interest in the area of devices, OS and wireless technologies. He is a Mobile Technology enthusiast and believes that Mobility is going to completely change the way we do Payments and Commerce. He wishes to share this belief with the world by providing such content through LetsTalkPayments. Ray has done his engineering as well as MBA.