We are in 2020 almost and are relaxing quite comfortably. What if someone asks you to imagine a world without cash? Even though it is tough to imagine a life without payments via card, but can we afford to take a step further and think of being in a cashless society? Our grandparents are still adamant about using cash wherever possible, whereas the new generation finds it a burden to carry dollars in their pockets. Just take out the card, swipe, and the payment is complete.
A cashless society was supposed to happen around the beginning of the 21st century. Some of us have been waiting and waiting. On the other hand, some are happy in their own spaces shelling out cash even for the car they brought last week.
Over the last few years, we have experienced a rise and fall of an alternate currency that is touted as the inevitable future. But the initial flourish was marred due to government regulations, insecurities, and many other reasons. Yes, we are looking at you, Cryptocurrency! You gave us a lot of hope and soon subsided to just being non-existent.
Cryptocurrencies like Bitcoin, Altcoin, and so many others exist in some parts of this globe happily, but the traction has slowed down considerably and the future uncertain. So before we try to replace cash, we need to answer if we are ready to do away with our insecurities? Can we embrace something the same way as we accepted money after the fall of the Barter System?
In this article, we will talk about several aspects of possible cashless society. Let’s wear our skating shoes and go out for a ride.
What is a Cashless Society?
The name is enough for you to understand what it is and how it will operate. A cashless society is the one without any physical cash and supporting only electronic form of payments.
It is that purported world where you will swipe a card for candy and a packet of your favorite Pringles. The card can be a debit card, credit card, or even contactless payment methods like UPI can come into play.
Do we need a Cashless Society?
There are two sides of a coin, and the two sides here are as drastically different as they could have been. Inadvertently, we all will agree to the fact that a cashless society will make the payment system more seamless. You go to a store and pay as you do now.
Store owners will have one less headache to manage. They won’t have to count the cash every day before closing the store! Also, this will help them get rid of manning costs for the protection of physical notes. The constant fear of someone running away with all our cash will fade away as well.
The consumers won’t have to look for change every time the shop owner gives you that nasty look. It seems all rosy. So does this mean that we need a cashless society? Let us find out.
Perks of becoming a Cashless Society
Fewer chances of tax evasion
How will people evade tax when all their transactions are via their bank accounts? There will be a transaction trail that will be impossible to delete. All those innocent faces looking to get away from the prying eyes of the government will have to disclose every transaction they make.
We all know how serious an issue money laundering has been over the years. The vision of a cashless society may enable us to curb it for good.
No need for Security Vaults
What do most people keep in their security vaults apart from their jewelry? Well, ladies, especially and men, too, have the knack of hoarding cash. Be it in stores or our houses, we have security vaults that have the job of keeping our hard-earned money safe.
If and ever if a burglar visits you, all of your money will take his side and run away with him. What will you be left with after the incident takes place? You will regret the decision to hoard physical money and keeping it in your home.
An advantage of a cashless society is the ability to do away with security vaults. You will have no money and hence no need for security vaults. It will also help your valuables be a bit more secure.
Easier Payments across the globe
Most of the countries have their currency around the world and follow stringent rules when it comes to other currencies. Whenever you head out of the airport, the first thing you look for is the currency exchange.
What if the countries accept cashless payments on-the-go? You won’t have to scratch your head and pay using your default card as you would have done in your hometown. You won’t have to bother about checking the exchange rates or if the country you are visiting accepts your currency or not. There is someone else who will manage it all on your behalf.
Probable Perils that may introduce themselves in a Cashless Society
We spoke of the possible advantages of a cashless society. What are the perils that may show up when you choose to shift to a cashless society? Here are some serious disadvantages of a cashless society –
Privacy may take a hit
Unless you are a mechanic, you will never know what is going on under the hood of the car you are driving. In a cashless world, there are severe chances of privacy taking a significant hit. We trust these banking bodies to keep our data safe, but data breach has become a common phenomenon these days.
Even the largest conglomerate has been suffering from it, and we can’t help but be wary of how our private information will remain anonymous in the long run. Not just that, we want certain transactions to stay away from our family members’ eyes. How can you imagine hiding a thousand bucks that you spent for a secret gift for your wife anymore?
You may be a technology savvy person, but I have seen innumerable people, even the young ones, who don’t care much about it. Let alone keeping themselves acquainted with the latest sorcery; they won’t also learn how to use a debit card. How can we expect them to lead their life happily in a cashless arena? Every passing day will be a fight for their survival.
Not only this, we will need a perennial supply of internet to make transactions. We cannot speak of tomorrow, but the internet is not stable in today’s world at least. Some regions have a good connection, and there are others with pathetic connectivity. Before we decide to step on to the future, we must ensure that the issue of connectivity is solved first.
Poor may suffer
How do we expect the poor who is barely making ends meet to adapt to advanced technology? We take far less time to understand and adjust to something new. A necessitous person working the whole day to be able to feed his children will have to shell out a part of his day to learn. Not just that, he will feel more like an alien and won’t find it as comfortable as seeing physical cash in his hands. There are chances that the poor will suffer due to the dream of the rich to go cashless.
Due to extreme competition, XYZ Bank is offering us 2 percent more interest than ABC Bank. We may find it lucrative enough to take the cash out of our home sweet home and deposit it in that bank. What if there is no option to keep the money at home? What if the banks know that we have limited options?
They will stop trying to offer something much better than the rest, and we will be the losers. Not only that, but we may pay more charges due to the extra work that the banks will carry out. More cash means the bank will hire more people, and the consumers will bear their salaries. There is also a fear of monopoly that may make its presence felt when banks would have the sole right on transactions. I guess you will be happier with that extra 2 percent offer!
We may not get any interests
Online payments demand charges and are not free, unlike transferring cash to your colleague. When we become a part of the world without any cash transactions, banks will have the upper hand. It can directly affect the already meager interest rates that we receive from the bank. We will have no other place than banks to store our savings, and it can be scary. Not getting any interest will have multiple macro and micro economy effects and can shake the balance altogether.
A glimpse of the Cashless World
Why do we have wallets every time we step out of our house? Primarily because we keep our legal tender in it. Imagine a cashless world, and your wallet having tangible money at all. Even though we are yet to experience a full-fledged cashless society, we can draw a picture by looking at the current scenario. Here is how our future cashless society may look like –
- We are already using a lot of credit cards and debit cards. These will be our primary weapons in the future. There will be other options for us too, but these plasticky things will stay as the primary.
- NFC-based payments and mobile-based payment apps like PayPal, Paytm, and other similar apps will gain more traction worldwide. They are already earning a lot of users, and it will multiply with time. These apps allow us to do everything at a single place, from ordering stuff to paying for flights.
- Cryptocurrencies, even though their future seems gloomy as of now, is a pretty innovative idea. They make international transfers seamless and don’t let currency issues play spoilsport. They stand unregulated as on date, and for them to continue, people must know what to expect from them.
The Sum Up
We are already following a partial cashless model, and there is no way it is going to reduce in the coming years. There are several benefits attached to our vision, but the perils are by no means ignorable.
It may make our life far more convenient, but we are letting someone else rule the roost on our behalf. Our privacy has taken a hit, but the fact that you don’t need to carry the exchange in your pocket every time has made you ignore it. Looking at countries like China and its vigil to take complete control, we are already unsure of what the future holds for us. All we can do is hope; hope that the chosen government understands that we would love to keep our privacy intact at all costs.
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