Humanity has made great strides. You cannot dispute that some tremendous changes have occurred in every aspect of human existence. One of them is the way we trade.
When The company created the idea of money, the barter system collapsed. Over time, the concept of currency evolved from coins to paper money and ultimately to cashless transactions. Today, we have arrived at a point where a cashless society is possible.
According to a recent study by AT Kearney, the first entirely cashless system will exist in the next decade. Cash payments accounted for fewer than 15% of all retail transactions in Sweden as of 2016. Additionally, UK Finance reports that 34% of revenues are cash, and debit cards have surpassed cash as the preferred payment method.
While you cannot phase cash out of our daily lives anytime soon, several technological advancements strive to eliminate the need for paper money. This category covers wireless payment methods such as credit and debit cards, digital wallets, and online banking. Without a doubt, a cashless society will have a profound effect.
Those with the technical capability to benefit from a cashless world will almost certainly find it more convenient. You get immediate access to all your cash holdings when you have access to your card or phone. The convenience factor is not the only advantage. Additional advantages include the following:
Reduced crime rates
Carrying cash puts you in a dangerous place where criminals can spot you. If the money is transferred to your e-wallet and placed in the wallet of a criminal, it will be impossible to trace or establish that it is yours. According to one study conducted by German and American academics, crime decreased by 9.8 percent in Missouri when the state substituted cash welfare payments with EBT cards.
Electronic paper trails
Financial crime, too, should cease to exist in a cashless society. Illicit transactions, such as drug trafficking or illegal gambling, are often conducted with cash to avoid easily leaving a transaction record and laundering money. Money laundering becomes problematic if the initial point of the money transaction is constantly known. It’s more challenging to conceal income and avoid taxes when every payment.
You can make anonymous purchases with cash. Without currency, we could not keep track of everything we purchase. Privacy may not concern some; many are concerned that businesses and governments may utilize our purchase history to follow, monitor, and even threaten us.
Reduced financial security
Cash protects you from all threats, saving outright physical damage and robbery. However, when money is stored digitally, it is susceptible to system failures and hackers. Additionally, any power loss or network failure may render your money unrecoverable. Cash provides a degree of financial stability that a cashless economy cannot.
Criminals will become more sophisticated
Since the government enforces monitoring of digital transactions and tracks black money, including drug cartels who do business in cash, it’s a basic plan to safeguard their funds. However, it provides law enforcement with a distinct edge. They can confiscate or destroy cash tracks, wreaking havoc on criminal groups. Law enforcement agencies might lose this advantage in a cashless world. A cashless society makes it easier to track certain criminals’ accounts; the absence of an alternative might drive many crime syndicates into offshore banking.
Numerous financial experts believe that currency will eventually cease to exist as a payment method for the products and services we enjoy. As contactless cards, mobile payment systems, and Open Banking accelerate the growth of digital payment alternatives, the demand for physical currency decreases dramatically.
34% of purchases are cash in the UK, and debit cards surpassed money as the most common payment method for the first time in 2017. Similarly, in Sweden, cash currently amounts to less than 2% of total transaction values, with that figure expected to decrease below 1% by the next three years.
Banks, FinTechs, and government agencies must collaborate to guarantee that the transition to a cashless society is as seamless and gradual as possible and that no segment of society is consequently left behind and financially exposed.
There are many other possible problems associated with a cashless society that You must address to maintain an adequate level of readiness.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.