What is the dark side of cashless society?
A concern closely linked to security is privacy. Identity theft and compromised personal information are potential dangers in a cashless economy, but privacy might be compromised in other ways too.
A cashless society would rely on a complex network of digital systems, which would be vulnerable to cyberattacks. If these systems were hacked, it could have a devastating impact on the economy. Privacy is the third challenge raised. Cash can be exchanged anonymously, leaving no digital trail.
In a cashless society, all payments are processed through digital networks. Banks keep an electronic record of transactions, and people access their funds through electronic systems.
- Privacy and anonymity. ...
- Identity theft and data breaches. ...
- Infrastructure vulnerabilities. ...
- Poor financial management.
The only way to pay for stuff in a cashless society is through digital transfers. These transfers can be done with debit or credit cards or through digital wallets (think Cash App, Zelle, PayPal, Google Pay, Venmo and Apple Pay).
Summary: Americans are using cash less frequently and making payments more often by credit card or through payment apps. Yet, many CFI customers still like having cash as an option.
When you pay digitally, you always leave a digital footprint, and this footprint is easily monitored by financial institutions. Understandably, consumers are uneasy about their data being harvested or tracked by big businesses. Many people also feel that cashless spending is more difficult to control.
Poor people who rely on cash to ensure that they budget properly. Anyone in an abusive relationship who may lose financial independence without access to cash. People with physical or mental health problems who find using digital services difficult.
On the impacts of a cashless society, I think other witnesses have clearly said this in a very effective way: We know that those who suffer most in a cashless society are immigrant communities, senior citizens, unbanked and/or unhoused persons, and others who are likely to depend on cash.
As of June 2023, about 943 million people in mainland China used mobile payments, bolstering the country's status as the world's largest cashless society.
How long until cashless society?
Physical currency isn't becoming obsolete any time soon, so it's important to weigh up your options before deciding to go fully cashless in 2024. Ensuring you can accept some cashless payments though, is essential to keeping with today's trends and customer expectations.
For instance, using cash instead of credit or debit cards may help keep some people from overspending, because you can see how little is left in your wallet after every purchase. In short, getting rid of cash would impose hardships on society's most vulnerable people and could jeopardize our privacy.
Higher Transaction Speed: Digital payments allow businesses to track payments and complete transactions faster compared to cash. Global Benefits of a cashless society: A cashless society enables easier money transfer and business transactions worldwide, particularly for those lacking well-developed ATM networks.
Cash allows us to make purchases anonymously. Without cash, we would be forced to leave a record of everything we buy. While this may not bother some, there are many who worry that governments and/or corporations could use our purchasing histories as a way to track us, monitor us, and even intimidate us.
Central bank digital currencies (CBDC) can replace physical money, especially in economies where cash deployment is costly, Managing Director of the International Monetary Fund Kristalina Georgieva said during a Wednesday speech.
Is India Ready for a Cashless Economy? The government's initiatives have contributed to equipping people to leverage several fintech solutions over the years. But although India has achieved significant progress towards going completely digital, we still have a long way to go.
Norways is the most cashless country, with only around 2% of payments being made by cash, and 100% of the population having a bank account.
Sweden. With a date set in 2023 to go completely cashless, Sweden is arguably the closest country to achieve this. It is currently not uncommon to see signs that say “No Cash Accepted” in various shops in Sweden.
Denver and Atlanta are the least cash-dependent cities in the country, with 97% of local businesses accepting electronic payment, whether it's via credit card, Apple Pay, crypto, or some combination. Quite a few cities in the Southwest and Pacific Northwest have converted from cash, too.
The big four banks have reassured customers they will maintain in-branch cash services, following Macquarie Bank's unprecedented move to phase out cash and cheque services entirely. Commonwealth Bank, ANZ, NAB and Westpac all confirmed on Friday that there are no current plans to go cashless.
What can the bank offer you instead of carrying cash?
Debit Cards. A debit card used responsibly can be the best substitute for cash, as long as you know there's money in the bank. By using a debit card, you're not incurring any new high-interest debt.
Data security - many people are concerned that their financial information may be compromised in the digital environment. Concerns about hacking, identity theft and other cybercrime. Lack of physical control - often managing money in cash gives people a tangible sense of control.
Why Eliminate Cash? Cash can play a role in criminal activities such as money laundering and allow for tax evasion. Digital transactions or electronic money create an audit trail for law enforcement and financial institutions and can aid governments in economic policymaking.
The move towards a cashless society started 50 years ago with the introduction of the Bankcard and was driven by technological advancements. But it really took off with the COVID pandemic when consumers and retailers were reluctant to handle potentially infected notes and coins.
- Invest in integrated payment solutions to help meet merchants' digital-first needs. ...
- Expand to adjacent areas to provide more “money management” capabilities. ...
- Explore the viability of new payment flows.
