Cashless Society, a Good or a Bad Thing?

Cash or Cashless? For a number of years now contactless payments and mobile wallets have been on the rise. Recently Shropshire council in the UK announced that it would be going completely cashless by April 2023. There are pros and cons to going cashless. With what seems to be the inevitability of becoming a cashless society, let’s take a look at the benefits and the pitfalls of the potential future of payments. 

Why do we want to keep the cash?

For some people cashless society would not be as beneficial as for others.  

Outside of the cities where the signal isn’t always great or people don’t have access to fast home internet, it is feasible that they would be left unable to make simple day-to-day transactions. 

Many elderly people are not comfortable with computers and phones, other people can’t afford them and have no choice but to stick with cash. 

Another point that has been raised is that it is much easier to overspend when you don’t “see” they money. Mobile banking and mobile wallets make it much easier to borrow money and make it more attractive to do so. The fear is that more people will be lured into taking on debts that they simply cannot afford. 

Data security is also something that people are wary of. Although contactless payments are in general more secure, data theft is still a problem and like with forged bank notes, thieves are always coming up with new ways to thwart the security systems that are in place to protect us. This is aside from the questions regarding how our data is being used by companies. 

Possibly the most pressing concern at present is the unpredictability of an unstable Europe. Most recently, with the war continuing to rage in Ukraine and constant threats to international security, what would happen if there was an attack on the infrastructure supporting a cashless society? 

Small business owners are also affected by mobile payment fraud as it costs them, not only the money they have received but also processing charges which can be quite expensive.

What is the appeal of a cashless society?

The biggest attraction of mobile payments is that it is much more difficult for the fraudsters to access your money. Cash is difficult to trace where as digital payments can be traced and stopped in a matter of seconds if there is any suspicious activity.  

Cash crimes such as burglaries and money laundering have significantly reduced since the huge rise in the use of contactless payments, especially since the pandemic. 

Difference in preference for contactless payments, pre pandemic and post pandemic
Difference in preference for contactless payments, pre pandemic and post pandemic 2

With all advice being to stop handling cash in order to slow the spread of infection, many shops and other establishments stopped accepting cash altogether. Then during lockdown, online shopping became the only way to buy anything not considered necessary. 

New cybersecurity technologies such as NFC (Near Field Communication, Two Factor Identification and Biometrics have made it much more difficult for cybercriminals to gain access to your money and data. 

Most mobile wallets offer a foreign exchange service so no matter where you are in the world you can access funds in the correct currency without having to worry about changing up money or obtaining travellers cheques. 

This change in the frequency of cash transaction will also make a difference in future health emergencies, limiting the spread of infection if another pandemic were to arise. 

Again, for small businesses, going digital removes the need for storing and transporting cash safely. 

Will we have a cashless society?

With an estimated 28 billion UK pound coins currently in circulation and a further 2 billion produced annually, it appears that although there has been a decline in the use of cash, many people are not ready to accept a completely cashless society. In the UK in 2021, over 4.5 billion bank notes were added to those already in circulation!  

Cash is not likely to be completely voided any time in the near future.  

Many mobile wallets offer cash pickups. This means that you can send someone a payment from your mobile wallet to a designated pick-up point, often a post office, shop or bank and the recipient can go in and collect the cash.  

It is still essential to many people to keep cash in circulation, so keeping the options open and giving people the choice between cash and cashless remains extremely important.