Moving toward a paperless society by 2024
The death of paper has been greatly exaggerated–so far. Last year, for example, the Treasury Department sent tens of millions of stimulus checks via the venerable United States Postal Service. No doubt this year, the IRS will receive many tax returns in the mail and send out many of those dreaded taxpayer notices in the same manner. Politicians covet the spectacle of showing off reams of printed laws and regulations. Framing certificates is still an office thing. And the ritual of retrieving the morning paper from one’s driveway remains sacrosanct for people of a certain age.
And yet, the paperless future promised decades ago has made substantial progress over the past 2 years, perhaps more than at any other period in history. Thanks largely to the pandemic, a host of “no-contact” protocols and technologies have suddenly become familiar. From omnichannel, contactless delivery and curbside pickup, to QSR codes, Apple Pay, and workflow software, the momentum has swung irrevocably away from paper.
Indeed, a tipping point was reached during the pandemic with business (mostly) leading the way out of the tree-filled forest. But the public sector stepped up, too. In 2021, for example, the fashionable city-state of Dubai became the world’s first paperless government. In Japan, customs, immigration, and quarantine documents can now be filled out online before travelling, avoiding paper forms. The same has happened or is happening to every conceivable bit of data that used to live on some kind of paper form or card, from vaccine cards to restaurant menus to movie tickets to ballots.
According to global consulting giant McKinsey, 70%-80% of buyers and sellers prefer digital self-serve and/or remote human engagement to face-to-face sales interactions. It’s becoming more and more likely, in fact, that the world will be free of paper long before it is free of COVID-19. Here’s why.
Hundreds of once distinct national economies are rapidly becoming one global economy moving toward a paperless system, if not a cashless one. The U.S. Federal Reserve System, which already creates hundreds of billions of dollars at the touch of a button, is currently investigating an electronic currency similar to the digital yuan released by China’s central bank last year and already used by more than 100 million people. Electronic money means no more trips to the bank teller or even the ATM. Electronic currencies are attached to your identity and distributed via your phone.
The paperless society may have started with a push toward a cashless society, but technology has fueled a far more ambitious movement.
Of course, payment methods such as PayPal, Apple Pay, Venmo, and Google Pay mean that paper dollars are increasingly avatars these days—or maybe it’s vice versa? E-payments and virtual shopping carts are standard across all industries, even in business-to-business transactions. This has fundamentally altered the labor market over the past 10 years. Disruptions over the next decade are certain to be even more profound. Given a choice as to how they pay for their purchases, customers will use the most efficient, safest, most flexible, and fastest methods. Even the home rental industry has begun migrating from the dreaded rent box to electronic portals that make paper checks obsolete and allow tenants to pay with cash or credit.
Indeed, check usage has declined nearly 90% over the last decade, with some economists forecasting they'll be obsolete by 2024–at the latest. Meanwhile, fintech and mobile payment apps, such as buy-now-pay-later, or BNPL, were among the hottest investments in 2021, having proved their mettle during the pandemic. Long gone are the carbon paper imprinting devices for credit cards and even the cash register receipt. Now your phone is your credit card, ATM, checkbook, and ledger all in one.
The paperless metaverse
In 2018, online payments increased by almost 40% to reach $904 billion. This number is expected to reach $1 trillion by 2022, an increase of more than 200%. More than half of Americans now use a mobile device to make a purchase while Alipay, the most popular digital-only payment system in the world, has grown to more than a billion users. India, the second most populous country on the planet, has seen an explosion in online payments and money transfers despite relatively low Internet usage.
Almost everyone will now make a digital payment at some point in their lives. And nearly nine out of 10 consumers will use a mobile payment device to do it. It’s not only ease of use but the ubiquity of cell phones and apps that’s fueling the virtual metaverse. According to Statista, there are 300 million cell phones in the U.S., meaning that about 90% of Americans–and virtually every adult American–has one. Every business must now have online payments to provide the choice, flexibility, speed, and convenience the modern consumer expects. And if you need a contract executed, you had better have DocuSign or another paperless app installed.
But going paperless isn’t just about consumers. Digitalization has major advantages for businesses too. As companies shift to software and even blockchain technology, what they get in return is efficiency plus lots of data. Digital payments not only cut the costs associated with paper check processes—in 2018, North American businesses processed over $18 trillion in paper checks alone, but at a cost of more than half a trillion dollars due to delays, labor, and errors—they provide companies with real-time information on purchase patterns and individual customer preferences. Eric Schmidt, former chairman of Google, has long predicted that data will be worth more than oil soon, and the success of companies such as Alibaba and Amazon underscore this point.
Follow the money
“If you want to know who gets hurt and who gets helped,” famed attorney Gloria Allred has said, “follow the money.” Consider, then, a recent study by credit card issuer Mastercard which revealed that while holiday spending rose 8.5% in 2021, e-commerce sales were up 11% over 2020 and up a staggering 61% since 2019. Digital spending is clearly hurting cash and helping other, non-paper forms of payment.
Visa, Mastercard, and JCB will all be transitioning to a “no cash” payments system by the end of the decade while more countries, such as Dubai and Japan, will either be cashless or in the process of digitizing paper documents, records, and systems by then. Meanwhile, drivers in some U.S. states will soon be allowed to carry a digital version of their driver’s license on their iPhone, and millions of people are already keeping boarding passes and proof-of-vaccination cards on their digital devices, among other things.
So, the paperless society may have started with a push toward a cashless society, but technology has fueled a far more ambitious movement. There is a virtuous cycle forming whereby digital payment systems open the door for more tasks to be done without paper, increasing non-cash spending in the economy and helping to reduce costs for businesses as well.
Proving the point may be this article itself, which you are undoubtedly reading on a mobile phone, tablet, or laptop computer. When Amazon released the Kindle reader 14 years ago, it didn’t make much of a splash. People associated reading with paper and ink, and Apple’s attempt at a personal assistant device, the Newton, had already flopped. A student at Harvard, where Amazon founder Jeff Bezos was speaking, famously advised him to sell his company to Barnes & Noble before it was too late.
But then people began to realize that if they could read work documents online, why not magazines, newspapers, and even books? Today, the Kindle is a huge success and finding a Barnes & Noble is nearly impossible. Fax machines and copy stores are relics as well. Paper itself cannot be too far behind.