A Cashless Society?

A little more than a year ago, we published a Dose article titled “In God we trust. All others pay cash.” about how many Asian Americans still prefer cash over credit cards. And when you go into many Asian restaurants that’s what they require – cash. No credit cards.

As a quick aside, while there are active efforts to help support Asian Americans restaurants, they’re suffering heavily during this crisis as the early stigma against Asian Americans carried directly to their businesses. Please support them if you can with takeout/Uber Eats (if they’re still open).

Well, while cash is still king among many Asian Americans, an interesting thing has been happening in Asia over the last few years, and it’s become even more apparent during COVID-19. Even before this pandemic the rapid adoption of mobile payment was apparent with 80% of consumers in China last year having used mobile payment. How many people use mobile payment today in the US where the vast majority of Americans carry a smartphone? Just 10%.

What is going on?

One of the reasons why Asians have trusted cash is that they simply don’t trust credit and have an aversion to debt. Thus, credit cards have never taken off in Asia like they have here in the US. What’s more, we in the US have a very robust infrastructure with credit card readers everywhere… except my favorite Korean Tofu house, and Vietnamese Pha noodle house and… well, you get the idea. So we have a very convenient, and accepted electronic payment system already in place that has allowed us to move beyond cash. Here in the US then, it’s a bit of the ‘don’t fix what’s not broken’ syndrome. Where in Asia, the mobile payment advancements have allowed the society to quickly evolve beyond cash payments in a convenient and acceptable way that has allowed them to do so without having to deal with credit.

Before COVID-19, if you traveled to China and wanted to pay with cash you would have been looked at with some contempt. As the store clerk looked you over and sighed before giving you that how-old-fashioned eye roll. Seriously – even the street vendors have moved to mobile payment with Alipay and WeChat Pay! And during the past few months, it’s grown even further as real fears of paper money being carriers of the virus being handed from person to person caused everyone to put that wallet away and move to contactless payment via their phones.

Contactless payment. It’s something I’ve been connected with for years actually. Before this current role, I worked at Wunderman where I lead the Shell US account and was the agency lead on a two year project to help bring mobile payment to thousands of Shell stations across the US. What did I learn from that? Americans are not ready for mobile payment. Unfounded security fears (Apple Pay is actually much safer than swiping credit cards) and the hurdle of reward systems/points that are tied to many credit cards is going to be hard to overcome.

However, as this pandemic continues, we shall see if the promise of contactless payment causes more of us to shift to contactless payment. No handing over cash. No touching a credit card terminal. Perhaps this is one Asian trend that will finally start to take off here in the US, and we’ll be able to point back to this pandemic as the catalyst that sparked it and finally helped tip us into broader adoption of mobile payment.

Until next time. #StayHome, #AloneTogether, #HateisaVirus


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