Cashless society? Not in the foreseeable future: Ovum

Most retail transactions are still being settled with cash

The amount of cash in circulation is continuously increasing and the vision of a 'cashless society' will not become a reality in the foreseeable future, according to Ovum.

Part of the Datamonitor group, this technology analyst firm says that in the coming years, cash will remain the primary method of retail payment by volume.

Distribution by ATMs

Today, most retail transactions are still being settled with cash, notes Ovum senior analyst Jaroslaw Knapik, who says this is happening despite the continuing predictions about the declining use of cash, and forms of payment that could take over.

Knapik also notes the European Central Bank, which reported that the number of bank notes from the Eurozone is rising by about nine per cent per year. More than 40 per cent of US dollar bills are now available as compared to the beginning of the millennium.

Most people like to visit their nearest ATM to take out cash and so this channel is still expected to grow. Ovum has found that the Asia Pacific is the fastest-growing market and accounts for more than 40 per cent of global ATM hardware shipments.

Technology investments

It is important to be competitive in this dynamic business environment and the research firm suggests that the banks who want to be ahead in the race should focus on maintaining or expanding their ATM channels.

The need of the hour is to focus on efficiency because users demand good customer service and it is important for the growth of the organisation.

Knapik said more banks are investing in technology because of the increasing cost of managing the ATM channel and want to reduce the cost of operating the device. The cost-efficient management of the ATM channel can be achieved by integration of the several service components.

"Given the fact that vendors able to provide integrated services are emerging, such a reengineering of processes and the underlying infrastructure is becoming much more feasible to manage," added Knapik.

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