Are you still paying with cash?

Aneth Ng-Lim

Posted at Oct 15 2018 04:25 PM

If you need to go to the toilet, and you happen to be in Sweden, not all public pay bathrooms will welcome you. That’s because in this country, now considered to be one of the most cash-free societies in the world, they won’t take your coins or bills to use a pay toilet. Instead, you will need your mobile phone to pay, and then wait for a code that is good for one-time use to open the battery-operated gadget attached to the bathroom door.

Imagine having to learn this process – confusing to some, stressful to others – while holding it in and that should be one incentive for you to join this century and start looking at digital payments.

Here in the Philippines, admittedly, we still have a long way to go compared to Sweden. In our country of some 106 million Filipinos, less than 5 percent own credit cards and the rest continue to pay their transactions with cash. Worse, only 1.3 percent of adults have an electronic money account. These statistics came from the Bangko Sentral ng Pilipinas’ 2017 Financial Inclusion Survey, a nationally representative study that collected data from Filipino adults aged 15 and above. 

Contrast these to Sweden where just 2 percent of transactions are now paid in cash, and research by leading financial companies watching the digital trend report they expect this to drop to 1 percent by 2020.

You could be thinking, I have no plans to go to Sweden anytime soon, and cash seems to still rule as king here in our country so why does this concern me? It concerns you because companies are now offering incentives for consumers to go digital. From your bank to your grocer to the cinemas you frequent and the restaurants you visit, not paying in cash will give you more bang for your buck. 

Here are baby digital steps you can take right now.

From offline to online banking

Are you still personally visiting your bank to get your account balance and withdraw cash? Check with your bank how you can get online access to your account and experience the convenience of round the clock banking that you can tap anywhere you are. Imagine the freedom of not having to wait for branch hours for your transactions, not to mention lining up and waiting for your turn!

Digital pays better

Once you have online account access and discover it works for you, shop for electronic savings accounts that pay better interest rates than regular accounts. Banks understand too well the cost of handling cash – that is having to collect cash, count it, safeguard it, transport it, dispense it – and that’s why they offer incentives for clients to switch to electronic banking accounts. On top of better rates and returns for your savings and investments, an electronic savings account offers a host of digital conveniences, one of which is online bill payments.

Automatic bill payments

Who doesn’t have bills to pay month after month and year after year? Once you become an adult and start making your way in the world, you will begin to manage one bill after another. Every bill has a different due date and has to be paid in a different office. With automatic bill payments that you can enroll to your bank account or credit card, everything will be paid digitally and you can say goodbye to queues.

Digital rewards too

You must have seen the signages at shops that say they accept digital payments from Paymaya to GCash to Alipay. Not only is that convenient, they also offer freebies like free dessert for restaurants, or exclusive discounts for stores. If you are making a planned purchase anyway, check and see if paying digitally will mean you also pay less.

Plus rebates for savvy netizens. I shamelessly admit I have made comparison shopping an art form. Then one day I discovered there are websites that aggregate the online stores you frequent and offer you rebates with every spend! Shopback.ph for example, rewards members with cashback rebates from their partner online stores and you don’t need to pay them a membership fee to join (I just hate it when I find out that others will charge you one after 3 months). From Honestbee to Book Depository to Amazon Japan to Photobook, earn back double digit rebates on your spend. Every time your rebates hit P300, you can already withdraw and they can credit your nominated bank or PayPal account.

Keep it digital

People who are introduced to the use of ATM cards appreciate the ease of withdrawing money anytime and anywhere. My suggestion: don’t treat ATMs like an extension of your wallet where you withdraw when you want. Instead make planned withdrawals according to your needs, and leave the rest as your savings. Don’t make it too easy to access your money because when you’re not holding the cash, you are less likely to spend it.

Your ATM card is all you need. But in the event that you have an emergency and need cash, there’s comfort in knowing that an ATM is just a few steps away. Or if you just need to make an emergency payment – for a utility bill you forgot or a check you need to fund – you may find that your ATM can save the day. ATMs are now also debit cards you can use just as conveniently to pay for purchases as credit cards. Plus, many banks are now connected that you can transfer funds from one bank to another – no need to enroll – just go to the ATM.

With all these advantages, you may wonder why only 1.3 percent of adults have electronic banking accounts and less than 5 percent shop with credit cards. The BSP survey listed concerns on trust, availability, and access. Individuals who have banking accounts are ambivalent about e-payments due to issues such as hacking, personal security breaches, and unsafe access.

The recent headlines about ATM breakdowns also do not help. Many of those surveyed point to lack of connectivity with electronic platforms such as internet and mobile banking. 

But on the flipside, those surveyed admit that once they try digital, the convenience, cheaper charges, and faster service get them hooked. Why not take the digital baby steps and see if this is right for you? Change is coming, and the writing on the wall is screaming digital.