Problems that a future with less cash will bring

Given the high percentage of Mexican users who use the cash to carry out payment operations, authorities of the federal government and of Banxico They have focused on reducing the use of bills and coins, favoring digital media. However the digitization process in Mexico it raises questions about what should be taken into account in a country for this purpose.

Benefits related to digital finance

In the wake of the pandemic, the digitization of payments has put more emphasis on some of the benefits it brings. “It’s more hygienic because there’s less contact and no bills or changes are shared,” said Geoffrey Smith, associate clinical professor of finance at the W. P. Carey School of Business from Arizona State University (ASU), “Things have headed for the cashless system; This is a good time for companies to implement it, taking into account that consumers accept it more, seeking security. “

Also, companies don’t have to deal with hiring armored vehicles to transport large amounts of cash, Smith recalled. Some companies accept digital payment, What Apple Pay. “I think that’s the future, where you use your phone and ditch the cards,” Smith said. “People like speed, comfort and keeping accurate records.”

With the arrival of new forms of digital payment such as and plastics that limit physical contact, as well as the emergence of non-traditional credit cards, the future of finance in Mexico seems to be increasingly digital. (Pixabay)

More digitization, less privacy?

However, as digital shopping from consumers, data can be mined to gain more personal information. “There is a loss of privacy. Now a electronic tracking of all people’s transactions and you can tell where they were, how much they spent and what a person bought, ”Geoffrey Smith warned:“ For example, if you go to the same place every day for coffee, a company can infer that you work in that area because you’re there 200 days a year at 8 am. “

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Inequality in personal finances

The movement towards transactions cashless also raises equity issues, because the people of low income are less likely to access accounts in traditional banksaccording to Debra Radway, a professor at Arizona State University (ASU) WP Carey School of Business and a certified financial planner. “Many banks have requirements for minimum balancesThey have overdraft fees and require many requirements that make it difficult for a low-income person to access an account at a traditional bank, ”said Radway.

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Local governments take action

Not everyone is embracing the cashless trend. Last year, in the United States, the city of New York he joined to Philadelphia Y San Francisco to prohibit stores from not accepting cash due to equity concerns, specifically the hardship faced by the homeless and undocumented to acquire bank accounts. “It will be interesting to see how we evolve towards payments on our phones without cash,” said Radway. “These technology companies Advanced offer banking-related services and allow you to move money without a bank. “

Points to explore for the Mexican case

Lack of cashiers Y Bank branches in certain regions, it raises actual costs to access a bank account and to use it frequently. At the beginning of 2020, only 51% of Mexican municipalities had at least one bank branch and 59% of the municipalities with a ATM.

Before the Bank fees, a lack of technology, and the informality, various businesses choose only to accept cash payments, thus limiting the use of bank cards.

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