A Cashless Society is Coming: Will it be Paradise or Dystopia?
People have been talking about the possibility of a cashless society for years now, but those predictions finally seem to be coming to fruition. Yet now that most people are using cards or phones to pay for items, we should ask ourselves whether that’s a force of good or evil (or maybe a bit of both). Let’s look at some potential answers to that question.
Cash payments have been on their way out for a while, and the pandemic accelerated that trend further—47% of US consumers even said they wouldn’t shop somewhere that didn’t offer contactless payments. Are we heading toward a cashless society? And more importantly, is this a trend we should embrace or fight against?
That depends on who you ask—while some people think a cashless society could be the best thing to happen to the world, others worry it could put all of us at risk, especially the most vulnerable. Before coming to a final conclusion, let’s give both sides a fair hearing.
Defining a cashless society
They used to say that cash is king, but as anyone who’s ventured outside of their house and into society over the last few years would be able to tell you, that’s no longer the case. A cashless society is one where most (if not all) payments are made through digital means—above all, phones and cards.
A decade ago, this would have sounded like a futuristic idea, but chances are that most people reading this think it’s an accurate portrayal of their life right now. Most of us get paid straight into our bank account and then access that money directly from our cards to pay for everything from groceries to tequila shots at the bar.
As cards, contactless methods, and peer-to-peer payments have become more commonplace, the move away from cash was always going to be inevitable to some extent.
But COVID-19 changed our spending habits and accelerated the trend. Cash was viewed as unhygienic and therefore unsafe, so even groups that might have been reluctant to ditch cash previously made the switch. Plus, some establishments stopped accepting cash payments.
Now the change has happened, we’re unlikely ever to go back—for better or worse.
What the facts say
In case you’ve been living under a rock and you’re not convinced a cashless world is coming, we only have to look at the statistics.
In 2020, just 26% of payments were made using cash in the US, with most transactions involving debit cards. However, cash remains popular for smaller purchases, making up 47% of transactions worth less than $10. This suggests we haven’t quite reached a cashless society but it’s still clear that people don’t like to draw out large wads of cash anymore.
And it’s not just the US where this is happening—these trends can be seen across the globe. For instance, in the UK, transactions involving notes and coins decreased by 35% in 2020. Estimates suggest that around 13.7 million people in the country already live a cash-free lifestyle—that’s almost 20% of the total population.
Okay, so the move to a cashless society is real. But what does it mean? It’s time to look at the pros and cons.
Benefits of a cashless society
First, let’s look at the bright side. There are some clear advantages of digital payments, which is why they’ve taken off in the first place.
On an individual level, most people would probably say that the idea of going into a cashless society seems like a positive development. After all, nobody likes a ton of heavy coins weighing them down or awkwardly waiting to collect their change from a cashier.
We can use digital payment methods for just about everything, so why bother withdrawing cash from an ATM each time? It’s less convenient—you never know exactly how much money you should take out, you risk losing cash if it drops out of your pocket, and you’ll waste time waiting in ATM queues and counting your change.
A less obvious benefit from using cards over cash is that you’ll have a readymade ledger of everything you’ve spent your money on in a given timeframe. This means you can easily keep track of your spending and see how well you’re sticking to your budget, especially if you use a budgeting app that links to your accounts.
When you use cash for transactions, you’re forced to note everything down manually, making personal finance management that bit more difficult.
It’s always been easier to commit crimes using cash, whether it’s tradespeople asking for cash payments to avoid listing them on tax returns, people buying drugs and other illegal substances with it, or money laundering.
As soon as you go digital, you create a trail that can be tracked by police or the government. So, a cashless society would make it much harder for criminals to commit the actions outlined above. Even if it’s not enough to eliminate crime altogether, shouldn’t we take what we can?
Dangers of a cashless society
But as we’ve hinted at already, a cashless society won’t exactly be all sunshine and rainbows. There are some significant dangers we need to consider.
It puts vulnerable people at risk
You might not see the point in using cash, and maybe nobody you know sees any use for it either, but this isn’t universally true. For some people, cash is still king—and in most cases, they’re the most vulnerable people in society.
Homeless people rely on cash donations to get by. And even if they were all magically given card readers, they wouldn’t even be able to set up bank accounts due to their lack of a permanent address.
Similarly, some people are in a situation where they don’t have their own bank account and are dependent on someone else to use one, such as a partner. This means they can’t buy anything without the other person’s permission, so in a cashfree society, it would be very difficult for them to escape.
However, while cash is still accepted, they might at least stand a chance of withdrawing some money from an ATM or borrowing it from someone else.
Then there are the people who simply aren’t familiar enough with technology to keep up. What would happen to them?
When you pay for everything in cash, you’re an anonymous free agent in the world. Nobody will know that you just splashed out $10 on a milkshake when you’re supposed to be on a diet or that you bought a $1,000 handbag. This is about more than just being secretive—it’s about protecting your rights and privacy. Do you really want your bank to know exactly what you’re spending?
Some might say this shouldn’t matter to you if you’ve got nothing to hide, but that’s easy to say when you agree with the status quo. What happens if an evil authoritarian government is elected tomorrow and we already have all the mechanisms in place for them to keep close tabs on us?
There are worries a cashless society could lead to more control over what we buy and do. For instance, the government could pass an overnight law saying that soap is illegal, and automatically block any transactions involving soap—making it impossible for anyone to get hold of it without stealing. Unless privacy coins such as Monero coin come to save us, this is a scary prospect.
Go cashless with MyConstant debit card
Even if you think society at large isn’t quite ready for a cashless society, that doesn’t mean you personally need to keep using cash if you’d prefer to harness the benefits of digital payments.
One advantage of them we didn’t talk about above is the possibility of using advanced fintech solutions to make your money go further and take advantage of compound interest investments.
At MyConstant, we let you seamlessly switch between earning 4% APY in an investment account and spending money on a debit card by transferring your money between the two. This maximizes your earning potential, and we’d like to see you try to do the same thing with cash..
When you use the card, you’ll also get:
- Up to 10 transfers a day
- Up to $5,000 a day to transfer or deposit
- Up to $10 ATM withdrawals per day worth up to $500 each
- Instant access from investment account
- Money FDIC insured up to $250,000
What’s not to like? To give it a go, sign up for free today.
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