New Era of Digital Transactions, Weighing on the Pros and Cons

Cashless transactions are becoming a norm in modern society. Most countries in the world have adopted an almost completely cashless society where people use debit and credit cards.

Sweden for instance is the first country in the world to completely go cashless and Australia is tipped to be the next country to follow the same route.

For most of the developing countries, this has not been possible. However, the paradigm shift is visible especially with the technological advancement in the banking sectors. The introduction of debit, credit cards, and money transfer platforms like M-Pesa in Kenya has greatly necessitated this.

The arrival of the coronavirus pandemic further pushed the need to reduce physical contact including cash transactions which would spur the spread of the disease.

In Kenya, money transfer platforms like M-Pesa, T-Kash and Airtel Money proved their efficiency with Kenya’s telecommunication giant Safaricom which owns M-pesa reaping big from the situation.

Cashless transactions have come along with many advantages and disadvantages as a modern means of doing business around the globe. Many people around the globe appreciate the fact that cashless transactions minimize security risks associated with carrying money in bulk.

Criminal gangs operating around large cities like Nairobi often target groups and people carrying cash to or from banks as ‘Maina’- name hidden, a reformed criminal narrates to us. “We could target of course people carrying cash to bigger bank branches around the CBD especially on Fridays and end months as this was the time most chamas met to contribute money.”

Cashless transactions ate easier to track and even make a future reference of the transactions. The problem of locating receipts and keeping huge books of accounts is forgotten in most small business enterprises that have adopted a cashless transaction.

Brian Ochieng, a small business operator, recounts of the days he had to note down every single transaction he did in his business to help him calculate his profit at the end of the day.

“Now I only have to subscribe for the monthly M-Pesa statements to be able to see who bought a commodity and how much I gave out,” Brian says with joy all over his face.

Buying or shipment of goods from international online retail businesses like Jumia and Amazon has been simplified as there is no need to exchange currency so as to trade. All one has to do is to order for the goods they want and make a payment.

The use of cashless transactions also has many disadvantages along as society shifts to this mode. Privacy concerns are a big worry for most customers who use this model.

In Kenya for instance, when you send money through m-pesa your details such as full names and mobile number is left with the recipient of the money.

“I send money from a bank account and this, therefore, means that my recipients have to know the bank I use,” says Mercy a college student adding that she does not find it cool transacting money to unknown business people directly from her bank.

Uses of mobile transaction options like m-pesa are also prone to customer reversal of already deposited money to business owners’ accounts.

This is especially common in campus business environs where some students are ‘very cheeky’ according to Nelson Mandela who runs a canteen in Maasai Mara University.

Mandela adds that some even go ahead to forward previous transaction messages to his account especially when he is attending to many customers during peak hours.

Cybersecurity threat is also a major concern that is giving authorities around the globe sleepless nights as far as the use of this mode of transaction is concerned.

Most apps that provide money transfer are prone to unethical practices such as hacking and this could expose one’s private financial data.

Cashless money transfer platforms attract a service fee per transaction as a means of getting revenue a practice that most people view as an extra cost on the use of this mode of transaction.