You have likely heard that the world is moving into a cashless society. There are already some coin shortages in the U.S. and many stores are asking for debit or credit card transactions only. I know many people who are on board with a cashless society.
But before you even think about how easy it would be to live this way, think about some of the ramifications. Consider what a cashless society really means in the real world.
It’s not all sunshine and rainbows. And if you’re worried about being tracked all the time, think about what happens when you take out physical cash from ways that you can pay. I’m not even a conspiracy theorist, but there’s something uneasy about a cashless society.
What is a cashless society?
Let’s start by just looking at what it would mean to be cashless.
That means having no physical cash. Every transaction would be digital using services such as pay by text and more. It would still be with the local currency, but it would be done by some sort of card or online transaction.
We are moving toward this. Think about how much you set up with direct debits/payments and how much you use your debit or credit card. However, physical cash is still a thing.
Every little payment you make is tracked and traced. Your bank keeps the details. And with the right warrants and need, access to your accounts can be granted to various services.
The Coming Cashless Society
The danger of a cashless society
There are definitely some benefits to doing digital transactions. I can send money easily and quickly to family abroad. I can have clients overseas who pay me. It’s possible to set up direct payments for my rent and bills so I don’t have to think about the dates. My car insurance and other payments are just taken out of the account on the day agreed to.
But then think about how hard it can be to get some of that money back. Say your car insurance charged you twice one month by mistake. Now, in an ideal situation, the car insurance company would admit the wrong and put the second payment back into your account without argument. But not all companies work like that, right? There are some you can’t even get on the phone! So, you’re left waiting and finding ways to contact a company to get your money back.
There’s also the problem of your data being accessed by a lot of people. Not all websites are secure. Hackers can get in and steal information. It happens all the time. If everything was digitized, it could lead to far more identity fraud than is already happening around the world. Get in touch with Sapphire to identify fraud and risks.
By hiring cyber security consulting services, business owners can gain access to the latest tools and technologies needed to protect their data and networks. In addition, these companies can help businesses develop policies and procedures to protect them from future attacks.
If your bank account is drained by a hacker or there’s a glitch within the system, that’s it. You have to fight to get your money back. There isn’t another way of paying. I’ve had a payment declined because a chip machine was faulty but I was able to pay with cash. That wouldn’t be possible with a cashless society.
And just think about frozen bank accounts. If your purchases are deemed questionable, your bank could freeze your accounts. They already do it to so many people and it’s difficult to get them reopened, especially if you’ve fallen for a money-laundering scam. At least right now it’s possible for something to be done through cash. Just think of what would happen if there was no cash at all.
It’s the little things in life
Then there’s the issues with budgeting. I know a lot of people who still budget with the cash in the envelope system. They need to see the cash physically leave their hands to know how much they’re spending. This isn’t just for older people who may not be comfortable with technology. There are people with mental disabilities who struggle with digital payments.
There’s a risk of these people overspending. A digital society would need to have some strict settings in place to help avoid going into an overdraft or something like that. It could mean loading up a prepaid card, but there are still limitations to that as it means people aren’t seeing the money physically leave their hands.
When you need to make a little extra money on the side, you wouldn’t be able to do those cash-in-hand jobs. Okay, it does mean that all pay can be tracked for tax purposes, which is a good thing, but it also means that there are issues with those who need to make a quick $50 at the end of the week just to pay off an unexpected bill. You wouldn’t be able to do a quick job for a friend or neighbor.
And there’s no way that you could have kids doing quick jobs to earn a bit of money. Think about the tooth fairy and pocket money kids get. All of that would be digital. Okay, kids would get used to it, but there’s something about physically holding pocket money. I remember whenever I’d visit my Nanna, even into my late 20s, that I’d get the sneaky $20 note. My parents do the same for my kids when they see them. None of that would happen in a cashless society.
We use physical cash to help our daughters learn to budget. They also have their bank accounts, but they get given a set amount and they are told they can spend that. Things are working differently purely for the pandemic, but we plan to go back to the cash-based system we had running for them. At four and eight, this was perfect!
Then consider the extra charges for your bank. Right now, we can take money out, transfer it to another currency, and use that cash in the country we’re visiting. We avoid the charges on the bank accounts. If we had a cashless society, we’d be constantly hit with bank charges!
Before you think a cashless society would be a dream, consider what it really means. It doesn’t mean there will still be a little cash here and there. It means taking out cash completely. Is that something you really want?