The future is cashless – this is what our Wirecard experts regularly report on this blog. But as we also find other perspectives exciting, we have asked various experts with different backgrounds for their insights, experiences and opinions about cashless as part of our “Cashless Think Tank” interview series (click here to read all parts published so far).
Today we continue with Markos Zachariadis who is Associate Professor of Information Systems & Management at Warwick Business School and FinTech Research Fellow at the Cambridge Centre for Digital Innovation. His research sits at the cross section of financial technology studies, economics of digital innovation, and network economics.
Markos, from your perspective, what are the most important advantages of cashless payment?
Every time I hear “cashless”, I think of “more data”: while customer convenience and reduced transaction costs are also really important, as cash can be expensive to handle from the merchant’s perspective, having a systematic way to collect labelled data in order to generate further insights about anonymized customers’ behavior and needs can be a source of competitive advantage.
In the mid to long term this will also be key for customer experience if one is able to match payment data with other customer data, be it structured or unstructured. This can lead to better-informed decisions about marketing campaigns, up-selling and cross-selling, and other customer-centric and personalization strategies, et cetera. The winning firms will strike a good balance between always respecting customers’ privacy and adding value by creating custom experiences.
What are the most important trends that are helping cashless to become more prevalent worldwide?
The most influential trends I see are embedded payment and “able to sense” payment. Embedding payments and integrating them further in customer journeys when purchasing products or services will help cashless become even more widespread in our daily life.
“Seamless and tightly integrated payment experiences will accelerate the emergence of #smartmoney that will work for the benefit of the consumer” – @MarkosZach, Professor @WarwickBSchool and #FinTechFellow @CDIhub @Cambridge_Uni
Seamless and tightly integrated payment experiences can also accelerate the emergence of “smart money”. I define it as money that will work for the benefit of the consumer without having to do time-consuming and complex calculations on what’s more cost-effective. Sensors and IoT devices will certainly add to the above.
How do you think cashless payments will be made in 2030?
Certainly, invisible payments are fast approaching and quite promising – but there needs to be an element of trust between the application that does the payment initiation and the user.
Payments will not just be cashless, but smart. Smarter payments will help in this regard, for example, by making sure that a customer is not overcharged or automatically taking advantage of discounts and promotions by using cashless payments seamlessly. Imagine, for example, a bot that is commissioned by a user to purchase certain products automatically from a list when they become discounted.
Transport of London is another good example: you never get overcharged but the payment system maintains a ceiling based on your usage and locations. Looking forward to seeing more applications of “smart money” in the near future!