Cashless Payment: The Definition, Examples, and The Benefits

Written by
Ekky Pramana
Last Modified on
March 7, 2024

In the continuously evolving digital era, cashless payments have become an integral part of daily life. The use of these payment methods not only facilitates transactions but also transforms spending patterns and consumer habits. From a basic understanding to practical examples of implementation, this article will comprehensively discuss cashless payments and explore potential benefits that may be overlooked from adopting this technology.

By detailing concepts, providing real-life examples, and investigating their positive impact, readers will be able to gain a deeper understanding of how cashless payment methods have transformed the landscape of modern finance and contributed significantly to advancing the global transaction ecosystem.

What is cashless?

Cashless or cashless payment methods are payment systems that do not involve physical cash, where transactions are conducted electronically through methods such as credit cards, debit cards, or digital wallets. This concept marks a shift from conventional transactions to more efficient and practical solutions. By understanding the essence of cashless transactions, we can explore the technology behind them and their impact on how people shop and conduct transactions. Whether it's online payments or using payment applications, cashless methods pave the way for convenience, speed, and innovation in managing daily finances.

Furthermore, the cashless phenomenon also brings about cultural changes in financial management. Society is becoming increasingly accustomed to the convenience of cashless transactions, stimulating the adoption of technology and enhancing business efficiency. Transaction security is also a primary focus, with continuous developments in security systems.

The history of cashless payment in Indonesia

The development of cashless payment methods in Indonesia reflects an extraordinary evolution in the financial world. Initially, customers were required to visit bank branches to transfer money or to conduct cashless transactions. The transformation began with the emergence of ATMs, a significant breakthrough in providing easier access for the public to transact without needing to visit bank branches. The next evolution came with the introduction of debit and credit cards, which opened the door to convenient transactions without dependence on physical cash.

However, this era was only the beginning. With the rapid development of technology, Indonesia witnessed further breakthroughs in the form of e-wallets, e-money, and QRIS. The emergence of e-wallets brought more convenience, enabling individuals to make daily payments quickly and securely through their smartphones. E-money also penetrated various sectors, from transportation to online shopping, eliminating the need for physical cash altogether. QRIS, as the latest innovation, provides a versatile solution using QR codes to facilitate payment processes more efficiently.

Thus, the journey of the development of cashless payment methods in Indonesia not only reflects technological transformation but also a significant shift in consumer and business behavior. This advancement creates a financial environment that is more efficient, inclusive, and responsive to the demands of the times. This history bears witness to the long journey toward the era of cashless payments, which has now become an integral part of the daily lives of the Indonesian people.

The difference between cash vs cashless payment

Cash and cashless payments have fundamental differences that reflect a profound transformation in the financial system. Cash payments involve physical banknotes or coins transferred directly from one party to another. Its advantage lies in its tangible nature, providing immediate certainty about the transaction value. However, cash payments have disadvantages, particularly related to security, the risk of loss, and limitations in transaction tracking.

On the other hand, cashless payments, such as debit cards, credit cards, e-wallets, e-money, and QRIS, offer significant advantages. These include higher security as transactions are electronically recorded, minimizing the risk of losing money. Additionally, cashless payments facilitate detailed spending tracking, support administrative efficiency, and provide convenience without the need to carry physical cash.

However, the drawbacks of cashless payments involve cybersecurity risks, especially in an era where personal data is highly valuable. Transaction costs and dependence on technological infrastructure also play a part. It's important to note that the sustainability and adoption of cashless payments also depend on financial inclusivity, where access to and understanding of financial technology needs improvement so that the entire population can experience its benefits.

Examples of cashless payment methods in Indonesia

In Indonesia, the rise of cashless payment methods has introduced a variety of innovations to meet the increasingly complex transactional needs of society. From bank transfers, virtual accounts, to payments using various financial applications, here are some examples that reflect the diversity of cashless payment solutions in Indonesia.

Bank transfers

This method allows users to electronically transfer funds between bank accounts, either through internet banking or mobile banking. It facilitates bill payments or money transfers without the need for physical cash.

Virtual Account

Virtual accounts are virtual account numbers that can be used to receive payments from various sources. They are commonly used for routine bill payments such as electricity, water, or online shopping bills.

Debit and credit cards

Debit and credit cards are commonly used payment tools. Debit cards are directly linked to a bank account, while credit cards provide limited borrowing capabilities with a specific interest rate.


E-wallet applications such as GoPay, OVO, and Dana provide convenience in everyday payments through smartphones. Users can easily make transactions, even for small payments.

QRIS (Quick Response Code Indonesian Standard)

QRIS is a QR code standard for payments that allows users to make transactions by scanning the QR code provided by merchants or service providers. It is a fast and efficient payment method.

Non-bank credit payment

This service allows consumers to make purchases of goods or services by paying on credit, without involving a bank. Akulaku and Kredivo are examples of applications that offer non-bank credit facilities.

With the diversity of these solutions, Indonesian consumers have flexibility in choosing cashless payment methods according to their needs and preferences. This transformation reflects dynamic adaptation to technological changes in supporting efficiency and convenience in transactions.

Benefits of cashless payment for consumers

Cashless payment brings several substantial benefits to consumers, transforming how they interact with daily financial transactions. Firstly, convenience is a key point. Consumers can make payments quickly and easily without the need to carry physical cash. A few clicks on an e-wallet app or scanning a QRIS code are sufficient to complete transactions, minimizing complexity and time.

Security is another aspect that adds value. By using cashless payment methods, consumers can reduce the risk of losing physical money and even have better control over their financial activities. Additionally, the presence of a digital trail allows for detailed transaction tracking, providing additional security and facilitating personal financial management.

Financial accessibility is also a significant benefit. Cashless payments enable consumers with limited access to traditional banking services to remain engaged in economic activities. They can use e-wallet apps or prepaid cards for shopping, bill payments, and even fund transfers without physically being present at a bank.

Furthermore, the adoption of cashless payments creates flexibility in consumer lifestyles. With various payment method options, such as debit cards, credit cards, and e-wallet apps, consumers can choose options that align with their preferences. This allows them to shop more flexibly, both in conventional stores and in modern e-commerce websites.

With these benefits, cashless payments not only bring innovation to how consumers transact but also open opportunities for a more modern, secure, and affordable financial experience. This transformation not only provides convenience but also supports financial inclusivity and makes a positive contribution to individual financial stability.

Benefits of providing cashless payment method for business

Offering cashless payments is not just an option but also a strategic decision that provides various advantages for modern businesses. First, transaction speed is a key aspect, minimizing the time customers need to make payments. This provides a more efficient shopping experience and enhances customer satisfaction, which, in turn, can create loyalty.

Security is another crucial factor. Cashless payments create a digital trail that can be monitored and tracked, reducing the risk of loss or theft. This instills a sense of security in customers, fosters trust, and builds a positive reputation for businesses. Additionally, with cashless payments, the risk of manipulation of physical money can also be minimized.

From an operational standpoint, offering cashless payments helps businesses reduce administrative costs associated with handling cash, such as counting, storage, and cash management. This brings efficiency to financial processes and optimizes time and resources.

Equally important, the adoption of cashless payments creates opportunities for businesses to innovate. With the integration of the latest payment technologies, such as QRIS or e-wallet apps, businesses can reach a broader customer base, enhance brand visibility, and create uniqueness in marketing strategies.

In the current digital economy context, businesses that offer cashless payment options not only contribute to the transformation of consumer habits but also are at the forefront of the shift towards a more adaptive and innovative business ecosystem. As an investment in convenience, security, and efficiency, cashless payments become a fundamental pillar for businesses exploring the increasingly connected and dynamic world of commerce.

Aspire, a leading fintech company in Southeast Asia, has been a pioneer in providing comprehensive financial solutions for businesses. Through its modern business accounts, Aspire streamlines financial management processes with the ability to issue invoices and provide payment options using virtual accounts.

Furthermore, Aspire's payment gateway offers more than 26 payment options for customers, providing businesses with the flexibility to adapt to diverse payment preferences. This innovation not only simplifies the process of receiving payments for businesses but also enhances the customer experience by offering various choices that align with their needs. Thus, Aspire's innovation reflects the future direction of business finance, where cashless payment options are key to improving efficiency, security, and customer satisfaction.

▶️  Watch Video
About the author
Ekky Pramana
is a seasoned writer specialising in business finance and management. With a writing history at Tech in Asia, Teknoverso, and various other publishers, he leverages his market expertise to empower and educate first-time founders in managing their businesses better.
Supercharge your finance operations with Aspire
Find out how Aspire can help you speed up your end-to-end finance processes from payments to expense management.
Talk to Sales