Have we found a way to solve the problems caused by money?

Have you ever been struggling with the decision of whether to bring money along or not? This has always been a tough question for many, as both choices possess limitations..

• Case 1: If people bring cash with them, the sense of insecurity might emerge as there have been cases where people are robbed for carrying cash.
• Case 2: The person may think that they may not need money for the day. However, for unexpected cases where money is required, it can be a tough time for them.

However, this is when technology comes to the rescue and with the recent development of technology, cashless payment has made the latter choice to become the more preferred option. People from all walks of life can still pay for their goods without needing to bring their wallet or and hence lowering their chances of getting robbed!

So, this time, we are going to introduce the cashless payment to you. There have been a lot of examples of cashless payment:

ez-link cards	NETS
WeChat Pay	支付宝(in China)

and so on.

From the dictionary, it explains cashless payment as functioning, operated, or performed without using coins or banknotes for money transactions but instead using credit cards or electronic transfer of funds. Doesn’t that sound magical? Do you want to know how the magic behind cashless payment works?

The magic starts by….

• Consumer uѕеѕ a сrеdit саrd fоr рауmеnt. Thе mеrсhаnt enters thе саrdhоldеr dаtа intо thеir рауmеnt ѕуѕtеm, (either Point-of-Sаlе Machine/Virtual Terminal Software/ e-commerce site).
• The асԛuirеr / рrосеѕѕоr rесеivеѕ card data from merchant. The credit card dаtа iѕ routed thrоugh thе payment ѕуѕtеm for processing.
• Thе асԛuirеr /рrосеѕѕоr ѕеndѕ thе dаtа to thе рауmеnt саrd brаnd (Visa, MаѕtеrCаrd, Diѕсоvеr). The credit card data iѕ thеn fоrwаrdеd tо thе iѕѕuing bаnk for vеrifiсаtiоn.
• Credit саrd is verified by iѕѕuing bank / processor. Card verification сhесkѕ for ѕuffiсiеnt fundѕ аnd ассоunt ѕtаtuѕ.
• Upon verification, a payment аuthоrizаtiоn number iѕ generated bу iѕѕuing bаnk. The authorization number indiсаtеѕ ассерtаnсе оf transaction and iѕ rоutеd back to thе рауmеnt саrd brаnd.
• The acquirer / рrосеѕѕоr rесеivеѕ thе authorization number frоm thе payment card brаnd.
• The асquirеr / processor ѕеndѕ thе authorization numbеr bасk tо thе mеrсhаnt.
• Mеrсhаnt соmрlеtеѕ thе sale. Cuѕtоmеr rесеivеѕ the gооdѕ оr ѕеrviсеѕ.

Now that we have talked about how cashless payment works… let’s talk about the benefits of cashless payment !!! :

1. As all these procedures automatically completed by the system, one doesn’t need to bring cash with them anymore if they find it troublesome and insecure as a phone with the payment function or a few cards will do.
2. Robbers cannot easily benefit from the cards if they don’t know the password, which makes one less likely to be targeted as a victim.
3. Robbers also are unable to use the cards to pay for large items as it usually need the signature of the original user and also a large retrieval of money from the account may trigger the bank and hence alerting them that the card may have been stolen
4. Also once the user finds out that his/ her card is lost, he/she would most likely immediately call the bank to cancel their card and hence the robber would not have the ability to use the card for purchases unlike if money is stolen, as money cannot be stopped from being used. Hence, after money is stolen, it is super rare for the money to come back to the original owners’ hand. Resulting in less money lost if one were to use cashless payment than cash payment if they were robbed
5. Lastly, people can shop online, or order meals without even stepping out of their apartments. This hence, make life more convenient for people to do their daily shopping of necessities and hence making life better and easier

On that note, we would also like to share and discuss some of the hidden problems and disadvantages of cashless payment and also how to solve it :

1. Cashless payment often may cause people to use more money than they can actually afford to use. This is due to the fact that when people use credit cards they often do not know how much they have used until it is too late (when they used more than what they can afford to use),hence it may cause them to be in a debt and cause them to owe the bank money. Unlike if they use cash, they would know how much they have roughly used and how much money they have left.
   1. However, it could be solved by the bank regularly sending texts to the user saying how much money they have used and how much money they have left, this is to constantly remind the user about his/her spending habits and hence preventing the problem stated above from happening
   2. Also, they could ask the bank to set a limit to how much money they can use in a day/week/month and hence limiting the amount of money they can use would also help them to prevent overspending
2. Cashless payment could also cause a drop in the amount of shops there are, as if people just purely use cashless shopping ie online shopping. Shops (not using cashless payment) would have lesser business and hence close down and hence reducing the amount of actual shops on the street (slowly) and hence indirectly affecting the economy
   1. This could be solved by shops having both an online version of itself and also an offline (real life) version, hence the shops would be able to use technology to advance itself instead of lagging behind
      1. Government also have initiatives which allow small shops to learn about these new technology available and hence let them learn how to use such that they would not be so behind in technological advancements, allowing them to survive in a rapidly growing and advancing society

So… a reminder, while enjoying the more and more advanced technology, do not forget to exercise!

To learn more, kindly visit this Lynda tutorial.