A Cashless Society

Advantages of a cashless society

Here are some of the benefits of going cashless.

• Convenience. One of the most significant benefits of a cashless society is convenience. With digital payments, customers can make purchases almost instantly, using any device with an internet connection. People would no longer need to worry about having enough change or carrying large amounts of cash.
• Security. Another advantage of a cashless society is security. Today, if someone steals your wallet, you can cancel your credit and debit cards to prevent thieves from accessing your accounts. But any cash in the wallet would be gone. In a cashless society, consumers would be less likely to be targeted for street crimes5 because criminals would know they're not carrying cash.
• Reduced costs. A cashless society could potentially reduce the costs associated with printing and distributing paper currency. This, in turn, could save governments money that can be used for other important investments.
• Stability. Some cryptocurrency enthusiasts predicted digital currencies would replace fiat money. However, the wave of bankruptcies in the crypto industry and sharp declines in the price of most cryptocurrencies6 highlights why crypto isn't necessarily a great replacement for cash. A dollar today is still worth a dollar tomorrow—even if inflation reduces that dollar's purchasing power over time. With cryptocurrencies, the market value is very volatile, and their worth can go up and down quickly.

Disadvantages of a cashless society

In addition to the benefits of a cashless society, there are some distinct downsides. Here are a few:

• Privacy and security. Two of the primary concerns with digital payments are privacy and security. Digital payments leave a trail that can be tracked and monitored. This means that customers have less control over their financial information, potentially leading to data breaches or other security issues.
• Inequality. Not everyone has access to digital payment systems, especially those who are unbanked (don't have a checking or savings account) or underbanked (have a bank account but regularly use alternative financial services, such as check-cashing outlets and prepaid cards).7 This means that people who are already struggling financially may have even fewer options for making purchases.
• Accessibility. A cashless society could make it more challenging to protect yourself in the event of an emergency or natural disaster. Cash can be quickly and easily accessed, if necessary. With digital payments, you're at the mercy of your credit card network or digital payment platform.

Should you start preparing for a cashless future?

A cashless society is not just an idea existing in theory—we're already seeing countries move toward this goal. But there's no need to go fully digital just yet.

In fact, a "less cash" society is the more likely scenario8 for the foreseeable future. In a less-cash society, many individuals and business owners will opt to go cashless, but others will continue to use cash.

In the meantime, if you're interested in integrating more digital payments into your finances, it's a good idea to become familiar with digital payment systems and other forms of electronic payment. This includes researching different payment methods—including credit and debit cards, mobile wallets like Apple Pay and Google Pay, mobile payment apps like Venmo and PayPal, digital banking features, and even cryptocurrency—and the risk of fraud or identity theft when using digital payment systems.

By familiarizing yourself with digital payment methods, you can ensure that you are prepared for any eventual move toward a cashless society.