Physical currency payment is a dying payment method, being rapidly replaced by digital currencies. The cashless society has been in the minds of futurists for generations. Now, with the rise of digital technologies that could not be imagined even 10 years ago, it's finally happening. New digital technologies allow consumers and merchants to avoid many costs and inefficiencies inherent in physical money exchange, like collecting, sorting, and transporting currency around. A Tufts University study concluded that the cost of using cash amount to nearly $650 a year per consumer from trivial fees like ATM fees and about five-and-a-half hours a year in time.

The costs of collecting cash from hundreds and thousands of fare-paying customers by transit authorities often amounts to more than the amount of money collected. Cashless systems eliminate virtually all of this expense. Cashless systems reduces the cost of labor for counting and reconciling cash transactions. Producing coins and paper notes is itself expensive. Electronic payments vastly reduces the cost manufacturing physical currency. Physical currency is also generally seen as a health hazard which is substantially reduced with cashless and contactless transactions.

The fastest growing and most advanced proximity payments technology involves the use of radio-frequency identification (RFID) beacons. These systems use low-powered transmitters or current-producing electromagnetic induction from magnetic fields to transmit encoded identification data to a receiver in response to an encoded handshake signal.

The first major consumer application of RFID beacon technology was in automated toll both collection systems. The driver buys into an account and receives an active transponder that is typically placed on a vehicle windshield. When the car reaches the tollbooth, the booth sends out a wake-up signal to the transponder that returns the unique account number to the reader on the booth. The system then bills the account for the toll amount.

Retail use of RFID systems is increasing. The systems allow consumers to simply wave or present a smartphone or special issued card that responds to RFID transponder-receiver systems which bill the customer's account for small purchases. The Smart Beacon system uses any smartphone without an additional payment processor. The system bypasses intermediaries to simplify quick cash transfers.