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The Pros and Cons of Moving to a Cashless Society (Disadvantages of a cash…
The Pros and Cons of Moving to a Cashless Society
Disadvantages of a cash-free world
Hacking
Hackers are the bank robbers and muggers of the electronic world. You can get hacked and lose all your money in a cashless-society.
Technology Problems
Glitches, outages, and innocent mistakes can also cause problems, leaving you without the ability to buy things when you need them.
Privacy
Electronic payments mean less privacy.
Inequality
The poor and unbanked will have an even harder time in a cashless society.
Fees, fees, fees
Payment processors may just cash in on the high volumes, eliminating the savings that should come from less cash handling.
Overspending
When you spend with cash, you feel the pain of every dollar you spend. But with electronic payments, it's easy to swipe, tap, or click without even noticing how much we spend.
Negative interest rates
Dropping the interest rate is typically a move to stimulate an economy, but the result is that money loses purchasing power.
Benefits of a cashless society
Paper Trails
It is harder to hide income and evade taxes when there's a record of every payment you receive.
No cash management
It costs money to print bills and coins.
Less Crime
With cash, it's easy to steal money, whether the amount is large or small.
International payments
When you visit a foreign country, you may need to buy local currency. But payments are easy if both nations can handle cashless transactions.
Examples of cashless society
Sweden
Its not uncommon to see sign that says " No cash accepted" in Swedish Shops and some banks no longer handle cash, but they handle electronic cash with paper less money
India
The India goverment banned 500 and 1,000 rupee notes to penalize criminals and informal economy workers. The implementation was rushed and 99 percent of the banknotes were deposites (the criminal doesnt lose much). The Electronic money increased temporarily but, will pre-demonstration level next year
Several nations are already making moves to eliminate cash.
What does a zero-cash world look like?
People also use electronic payments like Zelle, PayPal, and Venmo.
People use credit and debit cards. But not just that.
Without cash, payments happen electronically.
Mobile payment services and mobile wallets like Apple Pay provide secure, cash-free payments.
Cryptocurrencies are used for money transfers, and they introduce competition and innovation that may help keep costs low. Now, they have risks so they might not be right for widespread use.