Cash or check? In a world of digital payments, online bank accounts, and cryptocurrency, it's undeniable that technology has forever changed our payment methods and our thoughts about money. “Cash on hand” is largely a figure of speech these days, and the move toward a cashless society has had tangible impacts on how we conduct our commerce and settle our debts.

Here are three ways that technology-driven payments will continue to shape our society.

1. More Liquidity in Personal Finance

Even before the remote work revolution, people were already moving their financial lives online. It's practically unheard of for a bank or credit union to not offer some sort of online banking or mobile deposit. While larger corporations still favor the “every other Friday” direct deposit method, many jobs, especially in the gig industry, now pay more frequently via apps such as PayPal or Venmo.

More than 80% of Americans carry a credit card, and even “cardless” payment methods like Apply Pay are becoming more widely accepted. This, in turn, has led to more consumers making purchases on credit. This combination of the immediacy of paychecks and the availability of credit effectively raises consumers’ purchasing power.

If your tech-savvy grandma sends you $50 on Venmo, and you immediately make an online purchase, the funds haven’t technically settled into your bank account even though you are able to make your online payment. In other words, the delays caused by waiting for a paper check to clear are distant memories. Technology continues to make funds available now.

2. Marketing by Payment Method

These days, it's rare to find a cash-only store. It's common knowledge that businesses should accept credit cards, but the past decade has seen more than just a “we accept Visa/Mastercard” sticker on a restaurant window. A retailer's ability to accept other payment methods, such as Apple Pay or even Bitcoin, has become a unique selling proposition. Overstock made headlines when they announced their plans to accept Bitcoin, framing it as a step towards the digital age.

Many restaurants encourage users to place their orders via apps. Brick-and-mortar retailers often give discounts that are only available online. More and more businesses are driving their customer base to make purchases digitally, partly as a move to make the company seem modern and partly to streamline their own processes. Digital payments are easier for stores to handle than counting out exact change with dimes and nickels!

3. A Changing Relationship with Security

When was the last time someone checked the back of your ID to make sure that your signature matched the receipt you just signed? Many consumers have an almost paradoxical view of security when it comes to their credit card and bank account information.

As companies take increasingly complex measures to prevent ransomware attacks, and data breaches still erode consumer trust, it's easier than ever to cancel a stolen card. Many credit card companies allow users to use virtual numbers for online purchases and provide real-time fraud alerts for suspicious purchases (not to mention freezing a bank account from the ease of a phone app).

While our society is hyper-aware of digital security, it is so easy to take this kind of action that consumers have almost lost a sense of urgency. For example, if you're making a purchase from a website that you've never been to before, as long as the payment gateway looks “legit,” you probably wouldn't give it a second thought as you enter your credit card number. If it turns out that the site is a scam, it's easy enough to dispute the charge and take other steps to protect your money.

The burden of protection has largely shifted to the payment processors who must evaluate their clients for risk and take the necessary steps in order to limit the number of chargebacks. In other words, fraud is bad for companies, but not necessarily for individuals. In the future, if (and perhaps when) more purchases happen on the blockchain, there will be even less of a concern at the consumer level since financial security will be assumed.

What's Next

As finances continue to happen more and more in the digital space, liquidity and flexibility will be driving factors. It will likely only become easier to get paid, and to pay others. As peer-to-peer lending and instant deposits grow in popularity, businesses will need to consider how to remove the barriers that slow down these processes to stay competitive.