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Pros and cons of a cashless society

card machine

In the current market, a cashless system is often promoted as the future of shopping- which it already is to some extent. A lot of countries are starting to adopt this slowly, with the intention of phasing out cash in the not too distant future. Here’s our list of things that are good and bad about it:

 

Why Go Cashless?

#1 – Crime Reduction

The phasing out of cash will eliminate a number of crimes involving money- think laundering, counterfeiting, bribery and the buying of things that would require untracked cash (from drugs to weapons). You’ll no longer have to have staff constantly counting money, and stores will be a lot less appealing to people for break-ins without cash in the till.

In fact, recent studies in the Access to Cash Review show that 36% of people consider cashless businesses an important part of reducing crime. Another statistic is from Paymentsense, in which 31% of business owners said that bringing in new technology for finances helped make them feel more secure about their business.

 

#2 – No Need For Banks

Going to the bank to deposit money can be quite the chore, especially if it’s far away. Many branches, especially in small villages, are disappearing one after the other. For example, the HSBC in the North Yorkshire village of Kirkbymoorside closed around two years ago and left the only option of withdrawing money through ATMs in local shops, forcing members to travel elsewhere.

Removing cash stops this problem, as it makes it a lot more convenient for users to live their daily lives without ever needing to take out money.

On the subject of finances, the cost of implementing credit services will lower after their use reaches a certain threshold, with the costs for most cashless businesses for their credit card payments only being 1% of the transaction.

 

#3 – It’s coming anyway

Compared to the good old exchange of cash, we’re now living in what the previous generation would see as a sci-fi pipe dream. Fingerprint and eye scans aren’t rare, tapping a card against a sensor is enough to make a payment and there is no sign of slowing when it comes to payment options.

 

Access to Cash Review has even said that current trends in e-commerce make 2026 the estimated year where cash’s use completely stops. In their most recent data, it’s been shown that cash only makes up 13% of rent payments, 10% for gas, electricity or water and 8% for TV licensing.

Meanwhile, cash makes up 86% of newspaper payments, and considering the outdated nature of this medium, it can be inferred that cash is the preference of the older generation. With that said, the fading away of cash will stay gradual and constant as time goes on, along with the switch to online news.

 

#4- It’s easier for tourists

No more converting! In a cashless world, people can just take their card travelling and won’t have to worry about losing a large percentage of your money every time you want to switch over.

 

#5- Stops using resources

Coins and notes are made out of a lot of materials, and we’d have a lot more copper, nickel and steel if we stopped production and melted down all our coins. Copper ranks as the third-most used industrial metal in the world after iron and aluminium, according to the U.S. Geological Survey (USGS), so it would be useful to not have to use so much on money.

 

Why Not To Go Cashless

#1 – Crime will always be a thing

On the flip side to what’s been mentioned, there are other forms of crime that will increase as cashless society becomes the norm, with shop-robbers being replaced with hackers. The data breaches in businesses have grown as they become less reliant on cash, with hacking also holding the risk of the leaking of personal information.

 

#2 – Potential problems for those with less access

Not everyone benefits from this system. Access to Cash has said that specifically 17% of the population will struggle when cash fades away from society. With cash machines closing down at around 300 per month, those who don’t have a bank account, or the internet, may find it increasingly difficult to live as they did normally.

It’s been found that cash can help poorer people organise budgeting better, and generally offer them peace of mind. On top of that, over 1.3 million people in the UK don’t have a bank account, particularly those in the teenage range and below. This is a thing that needs to change if we’re ever going to make the transition to cash-free.

 

#3 – Blackouts

Blackouts aren’t hugely often in the grand scheme of things, but still occur somewhere in the world once a day on average. This is a big issue in a cashless society, because it would mean nobody would have access to their funds.

For the many small businesses in rural areas, an untimely blackout could mean closing your business down for a brief amount of time, which is a pretty big reason to think about system stability before going completely cashless. That being said, things like this are bound to happen and usually get solved quickly.

 

#4 – Other teething problems

Without cash, there doesn’t seem to be a widely accepted way to tip service workers yet, but some companies do this well- like Uber giving you an option to add a tip while paying on the app. Charity boxes are also something that will have to evolve too, but there are already card accepting ones being created.

 

Conclusion – Which Is Best?

There aren’t any completely cashless countries yet, but this is changing, and we can find out the answer to this question properly over time, starting in Sweden. Both sides have many pros and cons, but I would say cashless sounds better in theory. However, we’ll see!

 

Want your business to be cashless?

We here at CheaperPay can help your company accept card. According to Santander, 60% said they would use small businesses more often if they could pay using cards. Visit http://cheaperpay.me/request-a-quote/ for a FREE quote.

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