A Cashless Society: Elusive Dream or Inevitable Future?

13-05-2019 | The Blog Series

A Cashless Society: Elusive Dream or Inevitable Future?

As the use of digital payment methods grows amongst societies across the globe, the question of whether remains cash necessary becomes an important one.

It is a popular topic for debate, and many examples are given both in favour of cash as well to highlight the potential challenges of a society without it. Just google “Sweden cashless” or “San Francisco bans cashless” and even Google needs a moment to generate all the results.

“Taking cash out of the equation will seriously limit the criminal’s ability to make transactions under the radar”

So, why would anyone want a cashless society? There are several significant advantages that digital money has over the physical version. Physical cash can be untraceable, which is one of the reasons that it plays a key role in crimes such as tax evasion, the drug trade, terrorist financing and corruption, but also on a smaller scale like pickpocketing. Taking cash out of the equation will seriously limit the criminal’s ability to make transactions under the radar.

Contactless wearable payment

Additionally, handling physical cash is expensive, time-consuming and increases the risk of robberies. Companies that have large sums of cash on average pay higher insurance fees and are more often subject to employee theft.

When looking at people who struggle to get a grip on their finances, there are all sorts of options to assist them with digital cash. With digital transactions, you can get insights into your spending patterns, allocate funds for specific purposes and work on saving plans that physical cash doesn’t offer.

So all in all, it seems like an obvious choice.

Let’s take a quick look at what a cashless society would look like. Firstly; no bank notes and no coins. This means millions will need to be invested in adapting vending machines, phone booths (who still uses those?), cash registers, etc.

Other things will change too. Giving some pocket change to the musician on the street corner, shopping at your local market, and for payments in places where mobile payments can be technically difficult will all change in some shape or form.

In the face of technical difficulties, there are few fail-safe options available besides cash that will always allow you to pay. If bank accounts are hacked, it can leave millions with no alternative source of money.

“Two billion people worldwide do not have a bank account or access to a financial institution via a mobile phone, or any other device”

The biggest issue surrounding a cashless society, however, is for those who cannot participate in this digital transformation. Those without bank accounts will have extreme difficulty paying and receiving money. Two billion people worldwide do not have a bank account or access to a financial institution via a mobile phone, or any other device (Business insider – 2017).

Even though this number is steadily decreasing, it will take many years before this major hurdle towards a cashless society has vanished. Only when the entire population can participate in a cashless society, should it be desirable.

So the question remains, is a cashless society an elusive dream or the inevitable future?

In my eyes the advantages of a cashless society are as big as it’s one major downside, namely, the “what if my bank account is hacked?”

As a good friend used to say: “A prison’s purpose is to prevent all the ways a prisoner might escape, while a prisoner only needs to find one way that will allow him to escape.”

Replace “prison” with “bank”, and “prisoner” with “hacker”, and you have your problem.

Therefore I do not think we are ready for a cashless society, nor will be in the foreseeable future.

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