eCash and Digital Wallets

We are rapidly becoming a cashless society. A recent survey indicated that over 57 percent of Americans never even carry cash anymore, let alone use it for financial transactions. More and more people are instead switching to alternative forms of transactions, primarily e-cash payments, in lieu of hard currency; those numbers are expected to climb significantly over the next four to five years.

Additionally, there is a growing group of consumers and investors that are ranging far outside standard payment systems, and instead relying on new cryptocurrencies, like Bitcoin.  Our preferences for financial transactions are therefore evolving rapidly, and for good reason.

Here are three major factors driving businesses and consumers away from traditional payment instruments like cash and checks, and into e-cash payments, that you should consider today.

Growing Acceptance

In a bid to attract more customers and speed up transactions, more and more businesses are accepting alternative forms of payment like e-cash. There are numerous reasons for this, and virtually all of them involve improving business’s’ bottom lines. It is a well-known fact that businesses that operate on a cash-only basis are now losing collectively over $100 billion annually, due to loss customers who would prefer to pay by some other means. Noting this, along with the fact that millennials prefer digital payments over hard cash more so than other age groups, more and more businesses are now accepting e-cash as a form of payment. Additionally, the popular ride apps

Additionally, the popular ride apps Uber and Lyft rely completely on e-cash for payment, no cash is involved whatsoever. Apple Pay alone is now accepted by over 35 percent of U.S. merchants. As more and more businesses continue to accept e-cash to support consumer preferences, the system is going to continue to overtake all other forms of payment.

Convenience

Paying with e-cash, often in the form of a digital wallet, affords consumers many options that they do not have with one form of payment alone. First, you can use your digital wallet to seamlessly pay for things online, or in real-world transactions; alternatively, attempting to use your credit cards to buy something online is often a clunky, tedious experience, especially when inputting data on mobile devices.

E-payments also allow you to link financial activities more efficiently than you ever could before. For instance, you can pay for your groceries at Safeway using e-cash, then redeem discounts from your purchases with coupon apps like Ibotta.

Lower Costs, More Security

One of the best things about going to e-payments is that the transaction costs are substantially lower than those associated with credit card merchant services. For businesses, this means that accepting ecash not only increases your access to customers, it also lowers the cost of doing business. 

Additionally, transactions using an e-cash system are generally more secure than a standard financial transaction involving cash or credit cards. Most e-cash services, like the one Due offers, are encrypted, meaning your data is secure from point to point and less susceptible to the theft that credit cards are often prone to. The added security of your mobile device – usually protected by passcode or fingerprint scan, means that you can be that much more confident when you use e-cash to pay for a transaction.

William Lipovsky owns the personal finance website First Quarter Finance. His most embarrassing moment was telling a Microsoft executive, "I'll just Google it."

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