A Cashless Society
In Sweden, about 80 percent of the transactions are made with credit cards, mobile phones or internet banking. One of the causes for this high percentage is the app Swish. This is a mobile app, developed by Swedish and Danish banks, which promotes a cashless system. It is comparable to the ‘contactloos betalen’ (which is holding your credit card next to a scanner to make a purchase) in the Netherlands. Because these new systems offer more security and convenience, cash is becoming more and more unpopular in Sweden. Economics even say that Sweden might become the first cashless society within the next decade. However, this trend towards a cashless society does not come without problems. In this article we will explore the several pro’s and con’s of a cashless society.
Most retailers like having less cash in their registers. It gives them more security, as less cash can be stolen. It is also easier for them, as they do not have to bring their earned cash to the bank, one digital payment puts it on their bank account.
In third world countries, such as Somalia, having a cashless society is especially beneficial to the poor. They can pay their bills digitally, and do not have to have a bank account. Carrying cash around also makes poor people vulnerable. If their cash is stolen, they do not have anything anymore. So by making payments digitally, the money of poor people would be more secure. Having a cashless society can also help prevent fraud, tax evasions, money laundering and terrorist financing. The black market is almost entirely made up of cash, because it cannot be traced as well as digital payments.
However, having a cashless society is not beneficial for everyone. Older people for example, who have used cash all of their life, find it hard to adapt to this new system. Most older people do not have the desired technology, nor know how to use it. If we look at middle and upper class citizens, they do not benefit as much as well. Using digital payments might be more secure for some, but it can have the same drawbacks as using cash for others. It would be devastating for some people if criminals could easily trace their money.
Having a cashless society is also particularly vulnerable for hacks. Say for example, your account is hacked, or something has happened and you cannot access your account anymore. Then you do not have any money anymore. How are you going to live your life when that happens? When cash is still available, you do not become dependent on your bank account as much as when there is no cash available.
All in all, a cashless society has its benefits, but also its downsides. A cashless society could give a third world countries, and retailers more security. It could also prevent fraud and other criminal activities. On the other side, elderly, middle, and upper class citizens do not benefit as much as other people from a cashless society. Citizens become vulnerable for hacks, and it gives the banks a lot of power.
What do you think, should societies move to becoming cashless, or is cash still the way to go?
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1 thought on “A Cashless Society”
Really interesting article Stephan. I think the trend towards a cashless society is unstoppable. As a consumer, I tend to pay cashless, because it is convenient. I don’t consciously think as far as to what will happen when the system breaks down or gets hacked. A scary scenario, if the majority thinks like that. More awareness and caution is needed, indeed.