As we steam ahead with technology and the convenience of digital transactions, Adele Trathan looks at the pros and cons of a cashless society
We are in a world where many of us venture out of the house without any physical form of currency. Perhaps it’s only when a youngster troubles us for loose change, or we see someone on the street asking for money, that it becomes apparent our cash, in 2024, is largely digital. While that has various advantages, what are the setbacks, and is the notion of physical cash something that will die out completely in time?
THE PROS
Efficiency and convenience
Digital payments promise levels of efficiency and traceability that physical cash never can. Not only does this remove the heavy, clunky, grubby and wasteful handling of currency, it also vastly accelerates the pace of commerce.
Reduced crime
Eliminating physical currency could potentially usher in a safer era where certain crimes – such as burglaries and robberies – see a noticeable downturn. Without the allure of tangible cash, criminals may find fewer incentives in targeting homes or individuals for quick monetary gain.
Better financial tracking
Digitally, each transaction leaves behind a precise, electronic breadcrumb trail. For individuals, this offers a clear vantage point from which to monitor and manage financial health, allowing for meticulous budgeting and financial foresight. Government agencies also benefit, ensuring tax compliance is a less daunting task, potentially reducing tax evasion, and making for a more accountable financial system.
THE CONS
Privacy concerns
When each transaction is digitally recorded, the shadow of privacy looms large. Every simple pleasure, from your morning coffee to the gifts you select for loved ones, becomes data. This information, when collated, can be subjected to analysis, potentially leading to targeted marketing or even deeper intrusions into personal habits and preferences.
Technology dependence
As we phase out physical currency, our societal tether to technology strengthens. That means we become deeply dependent on stable internet connections and uninterrupted power supplies, and this reliance
has its pitfalls. A single technical glitch, a brief blackout or a system failure, could momentarily paralyse economic activities, underscoring the vulnerabilities of a cashless world.
Exclusion
Shifting entirely to digital transactions inadvertently creates divides. While urban populations might adapt seamlessly, others who are unfamiliar with newer technologies, such as the elderly, others who reside in remote rural regions, or those who are financially marginalised, could feel isolated. This digital gap risks side- lining significant portions of society, pushing them further from mainstream economic participation.
WILL WE EVER BECOME COMPLETELY CASHLESS?
It’s tempting to believe that the march towards a cashless society is inexorable. Tech giants and fintech start-ups alike are propelling us forward with innovative solutions. QR codes, biometric payments and even cryptocurrency are making the once unthinkable, thinkable. However, the totality of such a transformation is still debatable.
There’s a tactile nostalgia associated with cash – a physicality that many might be unwilling to forgo. Also, there are instances where cash still offers unparalleled convenience, especially in situations that require quick, anonymous transactions. It should also be mentioned that a physical cash transaction makes your pound go further – as the banks don’t take their cut on each individual transaction. This means the business you are spending your cash with receives the full amount of the cost price – without paying a commission for the transaction.
Imagine a world where the familiar chime of coins hitting a countertop is replaced by the silent tap of a card or the soft glow of a smartphone screen. It’s poetic, in a way, but there is loss intermingled with progress.
What is certain is that whether we leap into the abyss of the cashless or tiptoe cautiously, the future of money is undeniably changing hands.
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