The use of cashless transactions during the pandemic is increasingly accelerating and slowly becoming a lifestyle of the world community, including Indonesia. Various kinds of sophisticated payment methods without direct contact also developed rapidly into a safer and faster alternative. Amid the rapid development of technology, cashless payments that used to be limited to debit and credit cards have also expanded further.

Now, making payment transactions can be done in various ways through applications on smartphones. Starting from scanning QR (Quick Response) codes, biometric scanning, to utilizing Near Field Communication (NFC) technology even further. The uniqueness of the payment method using digital money is even like a science fiction movie that comes true.

Quoted from various sources, these are five advanced cashless payment methods that are developing in various parts of the world:

Fingerprint Scanning

In Indonesia, various companies usually use fingerprint scanning as a list of employee attendance. In some places, fingerprint scanners are used for access to a building/office.

However, it turns out that payment transactions can use fingerprints as well. Japan started testing the Fingerprint Payment technology system to facilitate public payment transactions in 2005.

Now, the payment option with fingerprint scanning is also available via smartphones. We just need to enable the option to scan fingerprints in applications that support it as authentication that we are the ones who make the payments.

Face Scanning

In addition to fingerprints, biometric technology for payments can also use facial recognition for authentication. The first parties who introduce it are Ant Financial Group and Yum China Holdings Inc. 

They collaborate to build facial recognition software for payment called Smile to Pay. The fast-food restaurant KFC in China is one of the first merchants that implements Smile to Pay for their cashless payment method.

In a nutshell, Smile to Pay works by scanning consumers’ faces to authenticate when they are about to make payments for purchased menus. After that, consumers only need to enter their mobile phone number for further processing.

The main goal to be achieved from this payment method is to avoid fraud and identity fraud. This face scanner combines a 3D camera and detection through algorithms to recognize individuals more accurately.

Eye Scanning

Another biometric technology that has been utilized for cashless payment methods is using the eye-scanning or Retinal Scan Payment. This eye-to-eye payment transaction was initially available on Japanese smartphones.

In 2015, Japan’s largest telecommunications company, NTT Docomo, established a strategic partnership with Fujitsu to issue a smartphone called FujitsuArrows NX F-4G. NTT Docomo claims that the Fujitsu Arrows NX phone is the world’s first smartphone that uses iris recognition technology and can use it to make payments.

Ring, Wristband, Bracelet, and Smartwatches

NFC may be familiar to Indonesian people as an alternative to advanced payment methods via card. However, overseas, the NFC function for payments has developed further and is not limited to only cards. People overseas also have alternative payment methods through accessories such as rings, wristbands, bracelets, and smartwatches that utilize NFC technology nowadays.

The Kerv Smart Ring is the world’s first intelligent ring to have NFC technology. They teamed up with MasterCard to bring payments through ring scanning. The payment method with Kerv Smart Ring is first available in London, England. In addition to MasterCard, Visa also developed this technology and supplied dozens of athletes competing at the 2016 Rio Olympics with NFC-enabled rings.

The term wristband refers to a ribbon-like object that wraps around the wearer’s wrist like a bracelet. Usually, these objects are made of silicone. Its popularity as an accessory rose in the early 2000s to show its user support for a social or charitable cause.

However, along with the rapid development of technology, wristbands can also be used as a payment instrument because NFC technology is already installed in them nowadays. In Europe, many use a wristband as a payment instrument to enter an event.

Cashless payments with wristbands have also started to appear in Indonesia. The most popular use is to pay transportation costs such as KRL and MRT.

In contrast to wristbands that look simple, bracelets have more varied designs and are more suitable for fashion lovers. The bracelet’s materials are also not limited to silicone alone. Sometimes, it can be a combination of metal, rubber, silicone, to wood. Not different from wristbands, a bracelet can also become a payment instrument if there is NFC technology installed in it.

Another accessory that can be used as a cashless payment instrument is a smartwatch. In some countries, smartwatches are commonly used as cashless payment instruments because NFC technology is installed in it. Some countries that use smartwatches as a payment instrument are Australia, Canada, France, Germany, Switzerland, Italy, Poland, Russia, Spain, England, and the United States.

QR Code

In the past, it was predicted that QR code scanning would not develop because it was considered impractical as a payment method like NFC. However, over time, the QR code turned out to successfully answer all the challenges. Nowadays, it has become one of the most popular payment methods used throughout the world, including Indonesia.

This growing popularity has become the background for Bank Indonesia as a regulator to formulate a National Standard Quick Response Code for payments. The concept was ratified through PADG No. 21/18/PADG/2019 on August 16, 2019.

Not long after that, on August 17, 2019, the launch of the name QRIS (Quick Response Code Indonesia Standard) with the UNGGUL jargon was inaugurated. The word UNGGUL here stands for UNiversal, GampanG, Untung, and Langsung.

Then, as of January 1, 2020, this QRIS system began to be implemented mandatorily by PJSP (Penyelenggara Jasa Sistem Pembayaran or Payment System Service Provider) for the MPM (Merchant Presented Mode) payment method. In short, since early 2020 QRIS has become a national standard that allows financial service users in the country to only need one QR code for all payments.

At the beginning of 2021, QRIS was used by more than six million merchants and the number is still growing. It is planned that the QRIS CPM (Customer Presented Mode) and QRIS TTM (Tanpa Tatap Muka) payment methods will also be launched this year.

QRIS deserves to be called a sophisticated innovation in payment methods. This is inseparable from its benefits in making it easier for merchants not to bother having many types of QR codes from various digital wallet products.

One of the goals to be achieved from the presence of QRIS is to support the creation of a cashless society, in line with the Gerakan Nasional Non Tunai (GNNT) or National Non-Cash Movement campaign launched by the government. With QRIS, it is also expected to create a non-cash payment system that is efficient, effective and refers to the main principles of a fast, easy, cheap, safe, and reliable payment system policy.

The Presence of Cashless Payments Makes Daily Life Easier

Today, technology has indeed taken a significant role in our daily lives. The impact can be felt in various sectors that have embraced technological developments, and the cashless payment system is one of them.

Most Indonesians are now familiar with the concept of cashless payment. Apart from the cashless society campaign that has successfully spread massively in the digital era, the pandemic situation has also helped in accelerating the adoption of this payment system. 

However, the main factor in the massive adoption of cashless payment is the convenience it provides. Cashless payment users don’t have to bother preparing banknotes, not worry about health during the pandemic because transactions are contactless, and the most important thing is the security factor.

Using cashless payments can prevent users from using counterfeit money that is detrimental to individuals and the country. In addition, every cashless transaction that occurs is traceable because the transaction history is well recorded.

However, it must be admitted that the variety of cashless payment instruments in Indonesia is still lagging when compared to developed countries such as America, Germany, and the UK. Cashless payment instruments in Indonesia are still limited to wristbands, applications on smartphones, and cards only.

If Indonesia wants to get out of this situation, the interest and use of existing cashless payment instruments must be increased again. Although it sounds cliché, the momentum of the pandemic as it is now should be used by various parties to push the use of cashless payments to the next level. So, in the future, we will not be left behind by developed countries that have already popularized various sophisticated cashless payment instruments.