Cashless society
Let me start by explaining what is cashless society. It is a society where no banknotes and coins are used in any financial transaction. Instead to make a transaction the only way is to transfer money digitally. To do that we can use credit or debit cards, mobile payment applications such as Apple Pay or Google Pay or cryptocurrency. As of today there is no country where all transactions are digital but it is believed that in near future there are going to be at least a few cashless societies. There are some factors that economists point out such as consumer preferences, competitive pressures on businesses, profit seeking by banks and government policies that facilitate cashless transactions. Another major phenomenon that made a big impact on digitalising transactions was 2020 coronavirus pandemic. On that time more and more people started to prefere cashless transactions mostly because of safety reasons but they realized how much easier it is to pay simply using only their mobile phones rather than cash.
Almost cashless
The closest country to be cashless is Sweden. Where only 15% transactions are done by use of cash. Government is making steps towards excluding all cash. Now it is acceptable for retailers and restaurants to refuse cash simply by posting a sign. What is more over half of all Swidish bank branches no longer uses cash. After Sweden other country that is close to being cashless is India.
Advantages
Lets move to advantages of such a society. Firstly the biggest advantage of them all is lowered crime rates. There is no doubt that getting rid of cash will make such an impact. There will be less assaults because no one has cash, less bank robberies nor larcenies of cars that transports big sum of money. Financial crimes will be much harder to make them happen. For an instance drug operations, illegal gambling, black markets, human trafficking all the bad stuff to simplify in all of those illegal transactions the money is paid by cash. When you pay by cash there is no record of transaction and also it is easier to launder. Second of all producing banknots and coins costs, same as storing cash. What is more security is nessecery for banks to protect from bank robberies. All this could go into oblivion in cashless society. Also nice thing we can add to that is that international payments become easier. However even now they are quite easy because of cashless transactions. Banks allow payments by card abroad so you do not need to worry about exchanging money.
Disadvantages
All this sounds promising but there is also a downside to cashless society. Many people that have poor financial situation could be left behing by transition like that. Elderly people could also have a problem with digital-only transactions because most of them are less acquaintanced with tech. Another thing is privacy. Almost every transaction will be visable. For most people it is not a problem but the more data floating around the more likely it is that it will get to unwanted hands. With cash transactions, money you receive or give , are much more private. What could be a really good anchor point not to switch to cashless society for many people. Furthermore when you have all savings on your digital account you will be exposed to cyber-criminals. It is not a popular topic to talk about and it still feels very sci-fi but it could be a real problem. Many people are not aware of cibersecurity and with that much data floating around that is not properly secured, cyber-criminals will for sure take advantage of that. Besides technology problems could be potentialy very harmfull. What is meant by that is there could happen some glitches, technical problems or even problems that are not on your side but by the side of the bank for example. When such a thing happens you could be left without a possibility to pay when you need it. Apart from that it is much harder to control your spendings when you are not using cash. When you use cash you see how much money is left in your wallet which allows you to visually see how much did you spend. With cashless payments it is much more possible to overspend and hit too much of a blow to the budget. Last but not least cashless transactions might become charged with fees. Payment providers could possibly charge it’s users in order to pay by application. Like it is in other way. There is up to three percent charge for credit card and mobile payments. What could make it hard to sustain on the market for small businesses and independent shops.
Conclusion
To sum up there is much to talk about. For now it is impossible to get rid of cash but in future this might be a possibility. For this day there is much more disadvantages rather than advantages of such society. There is no need to cut out all cash especially when it will badly affect some businesses and individual people. It is too much of a risk to switch from cash to digital currency at least for now. There has to be many steps taken to make it even possible for cashless society to function.
Sources :
https://www.britannica.com/story/what-is-a-cashless-society-and-how-does-it-work
https://www.thebalancemoney.com/pros-and-cons-of-moving-to-a-cashless-society-4160702
As living in a cashless society may not be the easiest and most convenient for some at the very moment, it will surely happen in a few years, whether we like it or not. All of the society adapts to all changes. It’s only a matter of time for the government to decide to switch to cashless society completely, but I believe many of us will be ready by then, and those struggling with financial problems or the elderly may have a solution prepared by the government- or something of the sort.
From my perspective, we are more close to becoming a cashless society than we can even imagine especially considering how much the world of technology has advanced over the past few years. That means that going cash-free is a matter of time. However, I can fully agree the complete eradication of cash has a bunch of significant disadvantages and may cause a lot of discontent.
Yes that is true it is unavoidable not to go cashless also I don’t think that all people will be prepared for this. In every step to improve living there will be concequences. We can only make them less significant but we cannot secure everyone from taking some sort of damage. The best thing for now that we can do is to make people more aware of the fact that it is going to happen sooner or later.
Probably the process of money digitalization is inevitable because of its benefits to the governments, but there are definitely usefulness to it for us considering that banking ecosystems in different parts of the world will become even more convenient.