Wednesday 23 October 2019

Are We Heading Towards A Cashless Society?

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Nowadays it is so easy to pay for almost anything without even having any cash in your hands. More and more places are making it easier to pay by card, even offering contactless payments where you simply "tap" your card, but is cash really being made redundant?

I have to admit I rarely have cash on my now unless I specifically go to the cash point to get it out for a specific reason. Everywhere from shops to market stalls and even car parks can all now be paid for using your card you could easily be forgiven for not remember to keep some change in your bag or wallet!

A recent report by UK Finance revealed that, for the first time, payments by debit cards in this country usurped those transactions completed in cash. The statistics showed that, in 2017, card payments increased 14% to 13.2 billion, while cash payments dropped 15% to 13.1 billion.

In fact, a global report published by consultancy firm A.T. Kearney suggested that some nations — with Sweden touted as the most likely — could even become a truly cashless society within the next five years. So, what are the reasons for this shift, and what are some of the pros and cons of going card only?

Why is cash no longer king?

The growth of e-commerce behemoths such as Amazon and eBay mean digital transactions are becoming the norm as many people prefer to do their shopping from the comfort of their own homes. Convenience is increasingly valued over anything else when it comes to our spending habits and being able to tap your credit or debit card when out and about is a far more straightforward solution than seeking out a cash machine and withdrawing money.

Some of the advantages

·         A lack of cash could prompt a fall in crime rates, as thieves are less likely to steal cards that can be cancelled by the owner immediately. Additionally, money laundering would prove more difficult as there will always be a paper trail for any digital transaction.

·         If more people own debit and credit cards, and use them sensibly, their credit report is likely to improve, which could open up more financial opportunities to a greater proportion of the population.

·        When travelling abroad, currency exchange should be more straightforward in a cashless society

Some of the disadvantages

·         Having all your assets saved in a digital system increases the risk of being exposed to data hackers and, if the worst was to happen, you’d have no cash source to fall back on.

·         Similarly, if your bank was to experience technical difficulties or your mobile app was to go down at any time, you may be left without access to any funds at a critical juncture.

·         An entirely cashless system could mean some people get into financial difficulty. Without physical paper money, people who struggle to keep a limit on their spending may easily find themselves in debt.

How do you feel about being in a cashless society? Do you prefer to use cash or do you mostly you card and contactless payments?


**This is a collaborative post in which I received a fee.**

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