It may be tough to imagine for some of us now, but before the 1980s, cash was king. Nearly every financial transaction happened in-person through the physical exchange of cash and coins. Aside from cash, there was a smaller percentage of transactions that required check writing.
One of the first modern transitions in the banking industry was the introduction of the debit card, which was also the industry’s first move away from cash. The First National Bank of Seattle distributed the first debit card to business executives with large amounts of money in their accounts. Fast forward to the mid to late 1980s, there was a fully functioning debiting system available to consumers. This was just a small taste of the convenience we now know, but even this changed the banking industry, the operations and the consumer experience in major ways.
As financial operations evolved, the need for improved security grew. Through just one card, an individual could gain access to all of someone else’s funds. Identity theft prevention, among other things, became much more important. This may be part of the reason many consumers did not embrace these advancements. However, once debit cards became widely accepted, new products like online banking were close behind.
In fact, debit cards are favored by the majority of Americans, leaving cash in the dust. While the COVID-19 pandemic expedited the shift from in-person to virtual and/or digital transactions, this trend slowly started in 1994 when Stanford Federal Credit Union offered internet banking to U.S. consumers for the first time.
What we are seeing today is vastly different from the attitude consumers had towards banking trends in the 1980s and 90s. According to research reported by Kommando Tech, 80% of Americans prefer banking virtually over visiting a bank branch in person. Considering how quickly consumers have accepted advanced banking practices, there is no mystery behind the growth of digital, often cardless, payment methods like Apple Pay® and Venmo.
The cash that was once considered a safe and trusted convenience has been deemed unnecessary by the vast majority of consumers who prefer digital payment methods. We are well on our way to becoming a cashless society. This is one of the many reasons Parke Bank has been carefully tracking the trends that make it possible for our personal and business banking customers to take advantage of these technologies.
Using Apple Pay® as an example, Parke Bank has made it simple for customers to set up this protected and convenient method of contactless payment using their debit or credit cards. With a simple download from their app store and a quick call to our Galloway branch, they’ll be ready for the cashless society we’re quickly becoming.
There are many benefits to being a cashless society: it is more convenient, manageable and flexible for individuals and businesses and it enables international transactions to be seamless. In fact, payment methods like Apple Pay ® are safer than using a physical card, or even cash.
Along with the benefits, however, come a few vital things to keep in mind. The increase of online activity requires improved security because as technology advances, the threats against it advance as well. The virtual use of sensitive banking information needs to be done through secure, protected devices to avoid being vulnerable to damaging threats like identity theft, hacking and more.
Becoming a cashless society has the potential to enhance the banking industry in exciting new ways, as long as banks and consumers are careful to improve their security measures accordingly. Parke Bank’s goal is to be a resource for our customers as the world of banking continues to evolve.
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