WHY EMPLOYERS SHOULD EMBRACE CASHLESS PAYMENTS

31th March 2022

The merger of three huge and powerful industries: telecommunications, banking, and retail, has resulted in the creation of a new global payment ecosystem that includes both physical currency and mobile wallets. There will be significant benefits if the business and public sectors work together to leverage the latest technology and realise the full promise of a cashless society.

It's critical to consider where Malaysia is on the road in becoming a cashless society. Until now, the transition has essentially been a transfer from physical currency to cash replacements. There will certainly be a cost when commercial entities are involved in processing those transactions. As a result, when the transfer takes place, there is a loss of value.

Like cash, there is an exchange of value in its entirety. It also necessitates the use of a national government as the payment provider, rather than banks or other financial institutions, thereby turning it into a state-backed utility. The money saved by not having to pay for processing may then be utilised to help individuals in need, such as by transferring it to a fund to revitalise economically poor areas, for example.

Financial inclusion will be aided by a cashless society in Malaysia as well as other countries, and the change of the last mile of money transfers, payments, and banking services. Cashless technologies may also be one of our most valuable assets in the battle against organised crime and corruption. The folks who stand to benefit the most are, once again, those who are most in need.

The Pros And Cons Of Moving To A Cashless Society

Benefits of a Cashless Society

A cashless society will almost likely be more convenient for those who have the technological abilities to benefit from it. As long as you have your card or phone, you have immediate access to all of your cash. The benefit of convenience isn't the only one. Here are a few more benefits to consider.

1. Lower Crime Rates

When you carry cash, you become a high-value target for robbers. It will be impossible to track your money or show that it is yours once it has been removed from your wallet and placed in a criminal's wallet.

2. Automatic Paper Trails

Financial crime should also vanish in a cashless society. Cash is commonly used in unlawful activities, such as illegal gambling or drug trafficking because there is no record of the transaction and the money is easier to launder. Money laundering becomes far more difficult if the source of funds is always known. When every payment you get is recorded, it's more difficult to hide income and evade taxes.

3. Cash Management Costs Money

It costs money to print bills and manufacture coins. Businesses must hold money, receive more when they run out, deposit cash when they have too much, and, in some cases, pay firms to safely transport cash.

To safeguard their branches from robbery, banks engage massive security teams. In a cashless future, wasting time and energy moving money around and protecting big sums of cash may become obsolete.

4. International Payments Are Simpler

You may need to exchange your dollars for local currencies while traveling. If you're traveling in a country that supports cashless transactions, you won't have to worry about how much local currency you'll need. Instead, everything is handled by the app in your mobile device.

Disadvantages of a Cash-Free World

Going cashless could be more challenging than anticipated, depending on your point of view. The following are some of the significant drawbacks of a cashless banking system.

1. Digital Transactions Sacrifice Privacy

Electronic payments do not have the same level of privacy as cash payments. You might think that you have nothing to conceal and you wholly trust the organisations that handle your data – but this is to your disadvantage. The more information you have floating around online, the more likely it is to fall into the wrong hands. You can spend and receive money anonymously with cash.

2. Cashless Transactions Are Exposed to Hacking Risks

Hackers are the electronic equivalent of bank robbers. You're more vulnerable to hackers in a cashless culture. If you are targeted and your account is emptied, you might face a loss of a lifetime of your savings. Even if you're covered by federal law, restoring your financial position after a breach will be inconvenient.

3. Technological Problems Could Impact Your Access to Funds

Glitches, outages, and unintentional errors can all cause problems, leaving you unable to access your funds. Similarly, when systems fail, merchants are unable to take payments. In some ways, even something as basic as a dead phone battery might leave you "penniless."

4. Economic Inequality Could Become Exacerbated

The impoverished and unbanked will certainly struggle much more in a cashless society unless specific outreach efforts are made. Those who cannot afford smartphones, for example, will be left behind if smartphone purchases become the norm. The United Kingdom is exploring contactless ways to donate to charities and homeless people, but these efforts may not be ready to replace cash donations just yet.

5. Payment Providers Could Charge Fees

Companies that build these services may not offer them for free if society is constrained to choose from only a few payment methods or if one app becomes the standard payment app. Payment processors may profit from the high volume by levying fees, obviating the cost savings that would otherwise result from reduced cash handling.

6. The Temptation To Overspend May Increase

When you spend cash, you physically remove the money from your pocket and give it to someone else, thereby recognising the financial impact. When it comes to electronic payments, though, it's easy to swipe, tap, or click without realising how much you've spent. Consumers may need to reconsider how they manage their finances.

EVOLET’s Salary Management System

EVOLET offers easy-to-use tools to make your salary payment system seamless and efficient. The application's built-in payroll administration system handles wage management for employers. Employers benefit from a streamlined process flow that includes quick reconciliation, backup, and record maintenance. As a result, there are less chances of payment data loss, and human computation errors are eliminated. EVOLET's salary management solution makes it safer and faster for everyone involved. It eliminates the need for employers to take money out of the bank, reducing the risk of robbery or theft. This is also true for employees who send money to family members back home. This task can take up to half a day once a month.

EVOLET is well-suited to two types of workers: migrant workers and low-wage Malaysians. Many migrant workers in Malaysia, both documented and undocumented, find it difficult to acquire a bank account. According to Johnson Yu, the creator of EVOLET, certain nationalities find it impossible to open bank accounts since their nations have been red-flagged by Bank Negara, even if they have work licenses and visas. Because they do not speak Malay or English, many migrants suffer a language barrier. For ethnicities such as Nepalese, Bangladeshis, Filipinos, and Indonesians, who make up over 60% of Malaysia's foreign labour, the EVOLET application has been transcribed into 12 different languages.

While not every business accepts digital payments currently, the vast majority of them do, with more on the way. You may perform transactions more conveniently, swiftly, and securely when you pay using your global e-wallet.

EVOLET’s E-Remittance

Many migrant workers are forced to keep their whole earnings in cash. However, when they share a house with a large number of other workers, they frequently experience security issues. As a result, many people end up sending all of their money back to their families in their home countries, leaving them with little money to spend on necessities in Malaysia. The e-remittance feature on EVOLET reduces the need for workers to transfer money via traditional means, saving them time and money on travel and waiting in queues at financial institutions. Workers can send money using EVOLET from anywhere, at any time, as long as they have internet access.

The high fees of traditional transfer methods take away a significant amount of their earnings, which is up to 30%. When these workers use EVOLET, they get extremely favourable exchange rates and would just have to pay a set fee for their remittances. It's also a lot more secure. The user will receive SMS notifications when the money arrives at its destination, or when they receive a refund if the money does not arrive. EVOLET is a migrant worker's digital wallet.

EVOLET is a digital wallet app for migrant workers.

Learn more at https://evolet.io/