Will we be a cashless society?
When Will Society Become Cashless? While it's impossible to accurately predict when the US will move to a fully cashless society, a Gallup survey reveals that 64% of Americans believe that all payments will become electronic at some point in their lifetime, with the figure jumping to 70% for those under 50.
A cashless future enabled by technology
We may not be a cashless society by 2060, much less by 2030. But the fact is we're closer to becoming a nearly cashless society every day. The transition from a mostly cash to nearly cashless society didn't happen overnight.
United States
The US is moving toward cashless payments, with a substantial increase in the use of mobile wallet apps and contactless cards. A report from the Federal Reserve Bank of San Francisco found that payments made using cash accounted for just 18% of all US payments in 2022.
When people are handling less cash, bank robberies, burglaries and corruption drop. Because cash is essentially untraceable, it's a useful tool for criminals, where digital currency is less easy to exploit, and can be shut down quickly if it falls into the wrong hands.
For instance, using cash instead of credit or debit cards may help keep some people from overspending, because you can see how little is left in your wallet after every purchase. In short, getting rid of cash would impose hardships on society's most vulnerable people and could jeopardize our privacy.
Poor people who rely on cash to ensure that they budget properly. Anyone in an abusive relationship who may lose financial independence without access to cash. People with physical or mental health problems who find using digital services difficult.
We have been issuing banknotes for over 300 years and make sure the banknotes we all use are of high quality. While the future demand for cash is uncertain, it is unlikely that cash will die out any time soon.
A cashless society runs totally on a government-backed digital currency. And while no societies are 100% cashless at the moment, some countries, like Sweden and China, appear to be headed that way.
Sweden. With a date set in 2023 to go completely cashless, Sweden is arguably the closest country to achieve this. It is currently not uncommon to see signs that say “No Cash Accepted” in various shops in Sweden.
Norways is the most cashless country, with only around 2% of payments being made by cash, and 100% of the population having a bank account.
Why shouldn't we go cashless?
The downsides of going cashless include less privacy, greater exposure to hacking, technological dependency, magnifying economic inequality, and more. Credit and debit cards, electronic payment apps, mobile payment services, and virtual currencies in use today could pave the way to a fully cashless society.
As of June 2023, about 943 million people in mainland China used mobile payments, bolstering the country's status as the world's largest cashless society.
- Invest in integrated payment solutions to help meet merchants' digital-first needs. ...
- Expand to adjacent areas to provide more “money management” capabilities. ...
- Explore the viability of new payment flows.
Analysis from Barclays Investment Bank, meanwhile, predicts that the global transition from cash to digital payments would reach a tipping point moment in 2025, when absolute cash usage would decline from 41 per cent in 2019 to 20 per cent by 2030.
As people move toward more electronic or digital forms of payment, it might seem like paper money is on its way toward obsolescence. But experts say that cash will always be around.
It's a good idea to keep enough cash at home to cover two months' worth of basic necessities, some experts recommend. A locked, waterproof and fireproof safe can help protect your cash and other valuables from fire, flood or theft.
Why Eliminate Cash? Cash can be used in criminal activities such as money laundering and tax evasion because it is difficult to trace. Digital transactions or electronic money create an audit trail for law enforcement and financial institutions and can aid governments in economic policymaking.
A society without physical currency is becoming an inevitability as electronic payments and online money transfers become increasingly popular across the globe, particularly in urban areas where physical transactions are expensive and inconvenient.
Paper currency and coins are unsanitary, inconvenient, costly to handle and easy to steal. Criminal enterprises thrive on the portable anonymity of the hundred-dollar bill. Cashless transactions solve those problems, advocates say. They also allow Big Brother to track the American consumer's every move.
But it is unlikely that there will be any major shift soon. The US economy is not only the largest economy in the world but is also diversified, dynamic, innovative and relatively flexible. While its share of global GDP has fallen, this is due to rising shares of emerging markets.
Will ATMs be obsolete?
With fewer brick-and-mortar stores and less consumer demand for direct cash access, those who argue against ATMs appear wise and prophetic. But while digital transformation has altered the landscape, it poses no threat to the use of ATMs.
While it is undeniable that the use of cash will decrease over time, it is unlikely to disappear completely. Importantly, the digitization of transactions and the elimination of cash has many challenges ahead.
One widely quoted report predicts that the global transition from cash to digital will reach a tipping-point in 2025, and the pandemic, in which contactless payments surged, has only exacerbated this trend.
Assessing the reasons why Japanese consumers prefer cash, Statista notes its security and reliability are highly valued. Over 55 percent of respondents cited concerns over personal information leakage as being a major drawback of cashless options.
The same trend was evident in Japan, where the volume of cashless payments increased 36% from 2019 to 2022. Piggy banks are a less obvious victim of Japan's move away from cash.
