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  • Writer's pictureBy Jay Shedd

Toward a cashless society

Financial technology is the future

Advances in technology have transformed industries, which have become more efficient, convenient and accessible. We don’t shop, interact, learn, play or work the same way we did 10 years ago.

We depend on financial technology, or fintech, for our daily activities from paying bills, shopping and sending money to loved ones to managing our finances, such as monitoring our bank accounts and investments.

Businesses now rely on fintech to operate – from mobile point-of-sale systems and taking orders from customers to managing their bank accounts.

Fintech is sometimes considered a separate industry in itself.

Broadly, fintech encompasses cryptocurrency like Bitcoin and Blockchain, mobile wallets like Apple Pay, investment apps like Robinhood and cashless payments for services like rides, food delivery and online and retail purchases.

Even loyalty programs are now leveraging fintech to provide more convenience to users, such as the PacificPoints app. PacificPoints is a loyalty program that allows users to earn points when paying their IT&E bill and purchasing fuel at Shell and products from Foody’s. From there, users can use the app to view their points earned and redeem points for discounts on their IT&E bill and free items at Shell and Foody’s. Points can also be converted to United MileagePlus points right from the app.

Fintech is largely driven by start-ups and innovators that share the goal of making financial services like loans, money transfer, business transactions and other banking services even more accessible and rapid.

Industry leaders imagine a farmer applying for a loan from their estate or a small business owner accepting payments easily and immediately receiving the funds in their account. Smartphones are an ideal platform for many fintech companies to literally get their services into the hands of their clients.


Mobile money, a component of fintech, brings financial freedom to many. Mobile money is a bank account accessed exclusively via smartphone. In some cases, users have a secure electronic account that is linked to their mobile number. The account may not be linked to a traditional financial institution or bank. Users can send and receive money with their mobile phone, as well as make purchases online or at shops. Some mobile money service providers also offer cash withdrawals at authorized establishments or ATMs.

According to Verified Market Research, a global research and consulting firm, the mobile money market was valued at $57.70 billion in 2019 and is projected to reach $722.28 billion by 2027. In addition, the use of fintech increased during the pandemic as consumers and companies shifted to remote financial transactions.

Many tech companies are diversifying their services to include mobile money and services traditionally offered by banks.

Sometime this year, Google is set to launch Plex, a digital bank account integrated into Google Pay and supported by several financial institutions. The digital bank will offer a checking and savings account with no monthly fees, overdraft chargers or minimum balance requirements.


Square Inc., the parent of Cash App, which allows person-to-person money transfer online, launched its own industrial bank. Square is known for its card readers and point-of-sale payment systems and recently began offering credit services for small businesses and entrepreneurs that use its products.

Based in Salt Lake City, the recently launched Square Financial Services offers business loan and deposit products. The bank completed the charter approval process with the Federal Deposit Insurance Corporation and the Utah Department of Financial Institutions.

Fintech centered around lending has the advantage of being able to approve loans quickly. Utilizing data analysis software combined with instant communication allow these lenders to be nimble, which is attractive to borrowers.

Even some retailers are seizing the opportunity to make financial services more accessible as a way to supplement their business model.

Walmart announced in January a partnership with investment firm Ribbit Capital to launch a fintech start-up. The start-up will be designed to develop and offer modern, innovative and affordable financial solutions, according to a release from the retailer.

The retailer has already been providing financial services with the Walmart MoneyCard, a prepaid debit card with no overdraft or monthly fees and no minimum balance requirement, and a partnership with Affirm, a fintech company that allows customers to buy an online item immediately and pay in installments.

While fintech creates a lot of competition in the finance industry and offers a lot of benefits to the individual, traditional banking continues to dominate the finance world, and that’s unlikely to change. There’s a lot of loyalty and trust placed in traditional banking institutions. In the U.S. and Europe especially, citizens are reliant on traditional banking.

Instead, to keep up with demand for convenient services and recent efforts to prevent the spread of Covid-19, traditional banking institutions are evolving with the times by utilizing technology to appease its customers with services like online banking and mobile apps that allow customers to deposit checks, transfer funds, send cashier’s checks and even apply for loans without stepping foot into a brick-and-mortar bank.


In the near future, banks are likely to offer more touchless services and even virtual assistants powered by artificial intelligence.

The growth of fintech and mobile banking, however, comes with two major challenges that investors will have to overcome.

First is security and privacy. Fintech must work to earn the highest level of trust from customers and protect against data breaches and hacking. Its users must feel safe enough to allow their month’s salary to be deposited directly into their digital bank account and assured that their data is not being sold to the highest bidder

Secondly, fintech must be easy to use to serve individuals with varying knowledge of how to use mobile devices or computers. If an app or website is difficult to navigate or certain transactions require too many steps to complete, users are likely be discouraged from using the service.

These are not insurmountable challenges. The beauty of technology is that, with a little bit of imagination and determination, it can be leveraged to accomplish extraordinary things. Our daily lives could be completely transformed by technology in surprising ways.

With fintech growing, are we closer to becoming cashless society?

There are certainly more individuals and organizations opting for cashless transactions in response to the pandemic.


For the most part, these online banking services are available in our region. And while online financial services, such as lending, are not widely used or even used here, it’s only a matter of time before interest picks up and an enterprising individual or organizations steps in to bring these services to Guam, the Marianas and the region.

In some countries, digital payments are the norm like in Sweden, which has plans to be cashless by 2023, or China, where close to 80 percent of transactions are made via mobile apps Alipay or WeChat Pay.

The rest of the world may be a long way from reaching these counties’ utilization of digital payments, but change is in the air.

And when the change comes, individuals and businesses alike will have to learn to adapt to the transformations that technology brings to the financial industry.

—Jay R. Shedd is the chief marketing officer at IT&E, the largest wireless service and sales provider in Guam and the Marianas. He has more than 30 years of experience in the telecommunications industry.

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