cashless society essay

The benefits of a cashless society

We're shifting toward a cashless society, with potential for enormous socio-economic benefits for both developed and developing countries. Image:  Jonas Leupe/Unsplash

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The first recognisable coins were produced in China more than 3,000 years ago.

If you visit China today, however, there’s a strong chance you’ll see people paying for things using facial recognition on their phones.

This is a radical shift, but it’s just the beginning of the cash revolution.

Have you read?

Africa should follow in india's footsteps towards a cashless economy. this is why, these are the countries that would benefit most from a cashless world.

The new global payments ecosystem, including both physical cash as well as mobile wallets, is the result of the convergence of three large and powerful industries: telecommunications, banking and retail.

And if the private and public sector can work together to harness the latest technology and realise the full potential of a cashless society, there will be enormous benefits.

It’s important to first reflect upon where we are on the journey toward a cashless society.

Thus far, the shift is basically a move from physical cash to cash-replacements. With private companies involved in processing those transactions, there is inevitably a cost. And that means there is a loss of value when the transfer occurs.

This is my vision of a true cashless society. There is an exchange of value in its entirety – just like cash. And it requires a national government – rather than banks or the like – to act as the payment provider, effectively becoming a state-backed utility.

The savings from avoiding the processing costs could then be used to benefit those in need, such as by being transferred to a fund to rejuvenate economically depressed areas, as one example.

This might sound counterintuitive, but I would argue just about everyone has access to capital. However, for the poorer members of society, there’s often a prohibitively high cost to accessing it. If you have a great business idea but can’t afford start-up capital, then your venture is unlikely to get off the ground.

A cashless society – along with the transformation of the last mile of money transfers, payments and banking services – will help to close the financial inclusion gap.

Cashless technologies could be some of our greatest assets in the fight against corruption and organised crime, too.

And, once again, the people who stand to benefit most are those who are most in need.

There are 1.4 billion people in the world who have to make do with less than $1.25 a day. At the same time, around $1.26 trillion is effectively stolen from developing countries , due to corruption, bribery, theft and tax evasion. If we could reclaim that money for those countries, we could lift those 1.4 billion people above the poverty threshold and keep them there for at least six years.

If everyone were connected to an end-to-end e-payment infrastructure – a cashless environment – there would be transparency in money flows. Whether it’s international aid or private investment, if everyone in the chain were connected digitally, you could see where the money went and how it was spent.

Any sums appearing outside of that framework could immediately be flagged and investigated. This would narrow the focus for law enforcement and forensic accountants, making it easier to target and recoup hidden money.

There are, of course, many challenges to overcome as we embrace this level of disruption. And governments will need to take preemptive and proactive action in areas such as identity management and the protection of security and privacy.

However, the underlying support structures to make it all possible – the building blocks, or e-plumbing – are already in place. We already have secure, enabled ecosystems and the next generation of infrastructure.

At Finablr, we have four decades of experience in regulatory alignment and cross-border compliance, with a network spanning 170 countries. We also have proprietary technology, which enabled 150 million transactions at a total value of $115 billion in 2018 alone.

There’s no going back – which means we need to face the risks and deal with some of the difficulties of going cashless in order to unlock the benefits.

In developed countries, a cashless society will deliver transactions that are seamless, frictionless and low-cost. And in developing nations, it could deliver life-changing socio-economic benefits.

This easily accessible exchange of value will create a more equal world, and strengthen the bond between people, regardless of where they live.

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• Banking Basics

The Pros and Cons of a Cashless Society

What do we gain and lose when cash is no longer king?

What Is a Cashless Society?

Benefits of a cashless society.

• Disadvantages of a Cashless Society
• What Does Cashless Look Like?

Examples of Cashless Societies

The bottom line, frequently asked questions (faqs).

The Balance / Caitlin Rogers

A cashless society might sound like something out of science fiction, but it's on its way. Many present-day financial practices and transactions already happen without cash, and many financial institutions, service companies, and even governments are proponents of the shift.

Key Takeaways

• Many countries are moving towards a cashless society, in which all financial transactions are electronic.
• In addition to simply eliminating the costs and hassles of managing currency, going cashless may also reduce certain types of crime.
• 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 full cashless society.

A cashless society is one where cash—paper and coin currency—isn't used for financial transactions. Instead, all transactions are electronic, using debit or credit cards or payment services like PayPal, Zelle, Venmo, and Apple Pay . Many countries are moving in this direction, but it's difficult to tell which ones will eliminate cash altogether.

In addition to logistical challenges, several social issues need to be addressed before a society can give up on cash entirely.

The benefits and disadvantages below can give you an idea of the myriad of effects going cashless can have on money and banking as you know it.

Reduced crime rates without tangible money to steal

Digital paper trail, and less money laundering

Less time and cost associated with handling, storing, and depositing paper money

Easier currency exchange while traveling internationally

Exposes your personal information to a possible data breach

No alternative source of money in the case of technical issues or hacker activity

Technological learning curve

Lack of control over spending without a physical reminder

Those with the technological ability to take advantage of a cashless society will likely find that it's more convenient. As long as you have your card or phone, you have instantaneous access to all your cash holdings. Convenience isn't the only benefit. Here are some other benefits.

Lower Crime Rates

Carrying cash makes you an easy target for criminals. Once the money is taken from your wallet and put into a criminal's wallet, it'll be difficult to track that cash or prove that it's yours. One study by American and German researchers found that crime in Missouri dropped by 9.8% as the state replaced cash welfare benefits with Electronic Benefit Transfer (EBT) cards.

Automatic Paper Trails

Similarly, financial crime should also dry up in a cashless society. Illegal transactions, such as illegal gambling or drug operations, typically use cash so that there isn't a record of the transaction and the money is easier to launder. Money laundering becomes much harder if the source of funds is always clearly identifiable. It is harder to hide income and evade taxes when there's a record of every payment you receive.

Cash Management Costs Money

Going cashless isn't just convenient. It costs money to print bills and mint coins. Businesses need to store the money, get more when they run out, deposit cash when they have too much on hand, and in some cases, hire companies to transport cash safely. Banks hire large security teams to protect branches against physical bank robberies. Spending time and resources moving money around and protecting large sums of cash could become a thing of the past in a cashless future.

International Payments Become Much Easier

When you travel, you may need to exchange your dollars for local currency. However, if you're traveling in a country that accepts cashless transactions, you don't need to worry about how much of the local currency you'll need to withdraw. Instead, your mobile device handles everything for you.

Disadvantages of a Cash-Free World

Depending on your perspective, going cashless might be more problematic than beneficial. Here are some of the major downsides associated with a cashless financial system.

Digital Transactions Sacrifice Privacy

Electronic payments aren't as private as cash payments. You might trust the organizations that handle your data, and you might have nothing to hide. However, the more information you have floating around online, the more likely it is to wind up in malicious hands. Cash allows you to spend money and receive funds anonymously .

Cashless Transactions Are Exposed to Hacking Risks

Hackers are the bank robbers and muggers of the electronic world. In a cashless society, you're more exposed to hackers. If you are targeted and somebody drains your account, you may not have any alternative ways to spend money. Even if you're protected under federal law, it will still be inconvenient to restore your financial standing after a breach.

Technology Problems Could Impact Your Access to Funds

Glitches, outages, and innocent mistakes can also cause problems, leaving you unable to buy things when you need to. Likewise, merchants have no way to accept payments when systems malfunction. Even something as simple as a dead phone battery could leave you "penniless," in a sense.

Economic Inequality Could Become Exacerbated

Unless special outreach efforts are made, the poor and unbanked will likely have an even harder time in a cashless society. If smartphone purchases become the standard way to transact, for example, those who can't afford smartphones will be left behind. The UK is experimenting with contactless ways to donate to charities and homeless individuals, but these efforts may not be developed enough yet to substitute cash donations.

Payment Providers Could Charge Fees

If society is forced to choose from just a few payment methods, or if one app becomes the standard payment app, the companies who develop these services might not offer them for free. Payment processors may cash in on the high volumes by imposing fees, which would eliminate the savings that should come from less cash handling.

The Temptation To Overspend May Increase

When you spend with cash, you recognize the financial impact by physically taking the cash out of your pocket and giving it to someone else. With electronic payments, on the other hand, it's easy to swipe, tap, or click without noticing how much you spend. Consumers may have to rethink the ways they manage their spending.

Negative Interest Rates Could Be Passed Onto Customers

When all money is electronic, negative interest rates could have a more direct effect on consumers. Countries like Denmark, Japan, and Switzerland have already experimented with negative interest rates.

Dropping the interest rate is typically a move to stimulate an economy, but the result is that money loses purchasing power.

According to the International Monetary Fund, negative interest rates reduce bank profitability, and banks could be tempted to hike fees on customers to make up that deficit. Banks are limited in their ability to pass on those costs because customers can simply withdraw their cash from the bank if they don't like the fees. In the future, if customers can't withdraw cash from the bank, they may have to accept any additional fees.

What Does a Cashless Society Look Like?

Without cash, payments happen electronically. Instead of using paper and coins to exchange value, you authorize a transfer of funds from a bank account to another person or business. The logistics are still developing, but there are some hints as to how a cashless society might evolve.

• Credit and debit cards : Cards are among the most popular cash alternatives in use today, but cards alone might not be enough to support a 100% cashless society. Mobile devices could become a primary tool for payments instead.
• Electronic payment apps : Apps like Zelle , PayPal, and Venmo are helpful for person-to-person payments ( P2P payments ). In addition, bill-splitting apps allow friends to split their bills easily and fairly. Fintech companies like Stripe, Adyen, and Fiserv support business-to-consumer (B2C), business-to-business (B2B), or what they now merge into account-to-account (A2A) online payments in a reliable and speedy fashion.
• Mobile payment services : These services, along with mobile wallets like Apple Pay, provide secure, cash-free payments. Many nations that use cash sparingly have already seen mobile devices become common tools for payments.
• Virtual currencies : Cryptocurrency is already part of the discussion. Crypto is used for money transfers, and it introduces competition and innovation that may help keep costs low. However, there are risks and regulatory hurdles that make cryptocurrencies impractical for most consumers, so they might not yet be ready for widespread use.

Several nations are already making moves to eliminate cash, with the push coming from both consumers and government bodies. Sweden and India are two notable examples with two different outcomes.

It's not uncommon to see signs that say, "No Cash Accepted" in Swedish shops. According to the European Payments Council, cash transactions accounted for just 1% of Sweden's GDP in 2019, and cash withdrawals have been steadily declining by about 10% per year. Consumers are mostly happy with this situation, but those who struggle to keep up with technological developments continue to rely on cash.

Sweden is gearing up to become the first cashless nation in the world, with an economy 100% digital by 2023.

The Indian government banned 500 and 1,000 rupee notes in November 2016 in an effort to catch criminals and those working in the informal economy. The implementation was controversial, in part, because these notes made up 86% of currency in circulation. However, criminals weren't punished for hoarding untraceable cash, which had been the intent of the move.

The Economic Times cited the Reserve Bank of India as it reported that electronic transactions had increased temporarily, but cash returned to pre-demonetization levels by the end of 2017.

While these two examples had varying levels of success, both countries struggled to address how the marginalized would fare in a 100% cashless society.

With the many technological and societal moves towards digital and virtual financial transactions, cash currency is becoming less and less common. However, the shift to a fully cashless society has many potential drawbacks, and only time will tell whether cash holds a special niche.

What happens to the cash in circulation if a society goes cashless?

Most countries have a department within their governing body that regulates the printing and distribution of currency, as well as its destruction. In the U.S., the Federal Reserve has the power to issue money, but the actual printing (and yes, shredding, too), is handled by the Bureau of Engraving and Printing within the Treasury Department.

Who wants a cashless society?

A cashless society would primarily benefit certain businesses. While some individuals prefer using debit and credit to cash for convenience, businesses benefit from processing fees when consumers use their apps and services to send and receive payments. Handling cash is also expensive, so moving to cashless payments will also save businesses money and make transactions easier to track.

U.S. House Financial Services Committee. " Touchless Transactions Act of 2020 ."

European Payments Council. " Sweden: Cashless Society and Digital Transformation ."

Institute for the Study of Labor. " Less Cash, Less Crime: Evidence From the Electronic Benefit Transfer Program ," Page 2.

United States Mint. " 2020 Biennial Report to the Congress ," Page 3.

Board of Governors of the Federal Reserve System. " How Much Does It Cost To Produce Currency and Coin? "

The White House. " Executive Order on Ensuring Responsible Development of Digital Assets ."

Federal Trade Commission. " Data Breach Response: A Guide for Business ."

TAP London. " What is TAP London? "

Greater Change. " Fund a Person's Path Out of Homelessness ."

Consumer Financial Protection Bureau. " Helpful Tips for Using Mobile Payment Services and Avoiding Risky Mistakes ."

S&P Dow Jones Indices. " Where Inflation and Interest Rates Intersect ," Page 2.

International Monetary Fund. " Back to Basics: How Can Interest Rates Be Negative? "

Internal Revenue Service. " Virtual Currencies ."

Knowledge at Wharton. " Going Cashless: What Can We Learn from Sweden's Experience? "

U.S. Department of State. " 2017 Investment Climate Statements: India ."

The Economic Times. " A Year After Note Ban, Cashless Economy Is Still a Distant Dream ."

Bureau of Engraving and Printing. " About the BEP ."

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The big idea: should we embrace a cashless society?

For those who can’t or won’t get banked or go digital, what happens in a cashless future?

How do you like to pay? Do you prefer to tap, wave, insert, single-click or double-click – or are you a hold out for hard cash? If it’s the latter, you’re fast becoming the exception.

Between our growing enthusiasm for online shopping, the ease and speed with which we can now make electronic bank transfers, and the inexorable rise of cards and the advent of digital wallets, more and more of us are shunning physical money. This is still a relatively recent trend. Cards only overtook cash as the consumers’ preferred mode of payment in the UK in 2017 – with contactless accounting for 40% of transactions. The shift has been dizzyingly rapid.

The big advantages of non-cash payments are that they are seamless, efficient, convenient. This clearly matters a lot to us. But has it been our decision to adopt these new habits, or have we sleepwalked into them, with a little help from those who stand to profit?

The truth is, it’s a bit of both. Merchants are keen to reduce cost and increase spend: the less friction we experience at the till, the less chance there is for second thoughts. Payment providers sell their equipment and services to merchants, so the merchants’ appetites are their primary consideration. On the other hand, we are the ones who have chosen to use cards and engage in e-commerce. If you can remember struggling with the limitations of eBay in the days of “Cash on Collection”, you’ll know that what you really wanted was PayPal. If you are old enough to remember queueing at the bank or the cheque guarantee card, you’ll know that you would have killed for instant bank transfers, debit cards and online banking.

But are there downsides to this level of convenience? What if our choice to abandon cash is chasing it over a cliff, and what would that mean? The Bank of England has committed to making physical cash available “as long as there is demand for it”. Presumably if demand ceases the Bank will stop. Handling cash presents high fixed costs; it doesn’t matter whether you are delivering £500 in £20 notes to an ATM or £50,000, the costs of driver, security and fuel are the same. Similarly, if a shop takes just £5 of cash in a day, the owner still has to run a till, maintain a float, account for cash payments and deposit that cash in a bank. The less we use cash, the higher the cost of handling it, which means fewer merchants will accept it and fewer ATMs will distribute it. Before you know it, the demand that the Bank is monitoring may have simply evaporated.

Should we care? Well, cancelling cash has more than a few ramifications. Many of our young learn about money by handling it, many of our old only feel comfortable using it, while those on a tight budget find it helps in managing their outgoings. Having to pat pockets or rummage in purses makes us more conscious of what we’re spending than swiping or clicking.

Then there’s inclusion. True, cash is insecure; cash holders miss out on interest and are unable to build up financial histories, which are essential for getting access to a wider array of financial services. That’s why “financial inclusion” usually means bringing people out of a cash-based existence and into the formal sector. But cash alone offers a universally attainable means of paying and being paid. For those who can’t or won’t get banked or go digital, what happens in a cashless future? There are an estimated 1.3 million “unbanked” adults in the UK and many more who lack either digital confidence or access. Not everyone is happy or able to wave a card, much less to buy now and pay later. Cash may be dirty, expensive and unsafe. It may aid and abet the criminal and the corrupt, but it’s also freely accessible to everyone.

This accessibility is cash’s upside and its downside. It’s available to the bad guys as well as the good guys. Physical money may be playing an ever-shrinking role in the legitimate economy but it still plays a large one in the underground economy; while the number of legal transactions involving cash is declining, the volume and value of banknotes in circulation is actually increasing . So alongside the merchants and payment providers hoping for reduced costs, increased spending and rich seams of data about customers, law enforcers and tax collectors might also be forgiven for cheering on the cashless revolution.

The economic and enforcement arguments against cash may stack up nicely, but a payment isn’t just an economic or administrative act; it is a social one that depends on the two parties’ common acceptance of a currency and the mode of delivering it. With cash this social act is limited to two parties – the payor and the payee – and it’s private between them. Conversely, digital payments leave myriad traces – traces that accumulate into vast stores of information about us.

Depending on how you pay, this record may be more or less extensive and may be visible to a few or several organisations. It may comprise information that shows who you are, where you were, how much you spent, what you bought and from whom. Your smartphone might reveal just as much information, if not more, but it’s still possible to leave your device at home, or even go without one. The equivalent choice won’t be available if cash goes.

Abandoning the freedoms of cash may not be of any great concern if you’re as pure as the driven snow and not too worried about being tracked and ad-targeted, but are you ready to settle for a world in which every transaction is recorded and, by definition, controllable? Think about that the next time you choose how to pay, because each time you go cashless, your decision is helping to shape our collective future. There may come a time when we all, to paraphrase Lord Byron, have cause to lament: “Alas! how deeply public is all payment!”

Natasha de Terán and Gottfried Leibbrandt are the authors of The Pay Off .

Further reading

The Betrayal: The True Story of My Brush with Death in the World of Narcos and Launderers by Robert Mazur (Icon Books, £14.99)

Paid: Tales of Dongles, Checks, and Other Money Stuff edited by Bill Maurer and Lana Swartz (MIT, £17.99)

This Is How They Tell Me the World Ends by Nicole Perlroth (Bloomsbury, £14.99)

Money by Felix Martin (Vintage, £10.99)

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Protesters gather in London in July 2023 against digital currencies, among other causes. Photo by Martin Pope/SOPA/Getty

Going cashless

It’s not in the interests of the ordinary person but it’s not a conspiracy either. a cashless society is a system run amok.

by Brett Scott   + BIO

Four centuries ago, a woman named Else Knutsdatter was executed in Vardø, a small coastal town in Norway. She was accused of having used witchcraft to raise an ocean storm that claimed the lives of 40 men. She wasn’t the only one to fall victim to 17th-century folk who – in the absence of other explanations – could be convinced that disasters were conjured by malevolent sorcerers. Ninety others were executed for conspiring to produce the same storm.

Today, we know that physics and atmospheric pressures produced those storms. So, in the realm of weather, we’ve moved to systemic thinking , where bad things don’t need to be explained with reference to bad actors. When it comes to descriptions of politics and economics, the progress is not so unequivocal. Do bad things like climate change, conflict and corporate greed happen because powerful politicians and CEOs construct it like that, or do they emerge in the vacuum of human agency, in the fact that nobody’s actually in control? This is a question that confronts me in the campaign to protect the physical cash system against the digital takeover by Big Finance and Big Tech.

Photo supplied by the author

For more than eight years, I’ve advocated for the protection and promotion of physical notes and coins. I wrote a book called Cloudmoney: Why the War on Cash Endangers Our Freedom (2023). In that book, I point out that the public has swallowed a false just-so story that says we are pining for a cashless society. All over the world, public and private sector leaders claim that ‘our’ desire for speed, convenience, scale and interconnection drives an inevitable digital transition. This is supposed to bring a ‘frictionless’ world of digital payment-fuelled commerce, done at the click of a button or scan of the iris. The message is: keep up or else face being left behind .

The fact that so many leaders recite this script triggers some folks into thinking ulterior motives are guiding them, and it is true that the finance and tech sectors, for example, gain massively from the digitisation hype. Over the past few decades, they’ve launched various top-down attacks against the cash system, something I chronicle in my book. Physical cash is issued by governments (via central banks), whereas the units in your bank account are basically ‘digital casino chips’ issued by the likes of Barclays, HSBC and Santander. ‘Cashless society’ is a privatisation , in which power over payments is transferred to the banking sector. Every tap of a contactless card or Apple Pay triggers banks into moving these digital casino chips around for you. It gives them enormous power, revenue and data. They can share that data with governments but, more often than not, they’re using it for their own purposes (such as passing it through AI models to decide whether you get access to things or not).

By rejecting the story that cashless society is driven primarily from the bottom up, I sometimes get accused of being a conspiracy theorist. It’s not hard to imagine the outlines of a ‘conspiracy’ when you look at who benefits most from payments privatisation. Not only are Visa, Mastercard and the banking sector big beneficiaries, the fixation on digitisation also extends the power of Amazon and other corporate behemoths that are moving beyond the internet into the physical world via smart devices and automated stores that plug into digital finance systems. It’s a small jump to imagine how governments can piggyback on this digital enclosure to spy on us, or manipulate us.

A ngst about this creeping enclosure finds widespread expression on social media. In London, and other places where the use of cash has plummeted, it’s turning up in the form of warning posters and pamphlets handed out by conscientious objectors against ‘cashless’ establishments. They warn against a looming digital takeover, but what they don’t realise is that the powerful corporations leading this takeover are themselves led by a larger puppetmaster, and this ‘puppetmaster of puppetmasters’ is no conspiring group of elites. It’s a system , and the dominant stories about digital progress are its ideology .

Systemic thinking requires stretching out the mind to picture powerful but invisible forces. So, let’s ease in through a simple thought experiment: imagine a million blindfolded people tied together, trying to find a direction to walk. They collectively form a system , but its interdependence is so complex that it’s almost impossible for people to coordinate. This means they default to some lowest common denominator, vaguely stumbling in a direction without knowing why. This resembles how our global economic system works. We’re all tied into complex webs of interdependency, and the system generates pressures that require it to expand and accelerate. Its logic demonstrates almost evolutionary properties, such that anyone who goes against its default tendencies hits a wall, while anyone who stumbles in the direction of its prevailing current doesn’t. This may sound abstract, but we can see it clearly at work in the world with physical cash.

For centuries, the capitalist system has been underpinned by nation-states that have fostered the growth of large firms. For a long time, cash helped that system to expand and accelerate. In the 1950s, corporates were more than happy to have adverts featuring people using cash to buy their products, but in the contemporary moment firms are turning against it. Cash is hard to automate. It cannot be plugged into globe-spanning digital infrastructures. It operates at human scale and speed within a system that increasingly demands inhuman scale and speed. It’s creating ‘friction’ at a systemic level , so even if you like cash at a local level, you’ll gradually find yourself coerced away from it.

Amazon lacks infrastructure to process cash, and street-level shops are drawn into this systemic recalibration

‘Coercion’ in this situation doesn’t mean a consortium of CEOs or politicians will force you to stop using cash. If you are tied into a system that contains processes beyond your control, then the system itself can just pull you along. Capitalism often operates on autopilot, with the players following a set formula to boost profits, and one part of that formula is to automate stuff. In 1759, Adam Smith introduced the metaphor of the ‘invisible hand’ to illustrate how all these movements, and these chains of interdependency, can be mapped. For example, Lloyds Bank, guided by shareholder demands for profits, shuts down physical branches to cut costs by pushing you on to automated apps. Having no branches makes it harder for small businesses to deposit cash, so they are nudged toward putting up signs saying ‘We’re cashless.’ That then sends a message to customers that there’s something newly unacceptable about cash. At the same time, people will notice that banks have shut down many ATMs, with the banks justifying this by saying their customers are ‘going digital’, but this creates a self-fulfilling prophesy because removing ATMs lowers public access to cash, making it harder to use. Lloyds and other banks then see the resulting up-tick in digital finance as implicit permission to close down further branches.

What we have here are a series of feedback loops, all serving the prevailing systemic logic of expansion and acceleration. Cashless society, then, is not just a privatisation process, but also an automation process. Automated giants like Amazon in fact lack any infrastructure to process physical cash, and street-level shops are being drawn into this systemic recalibration. Hipster cafés in London have signs saying ‘We’ve gone cashless’; what they are actually saying is ‘We’ve joined an automation alliance with Big Finance, Big Tech, Visa and Mastercard. To interact with us you must interact with them.’

The politics of the ‘invisible hand’ can be visualised with a pyramid:

Where does power lie in this pyramid? Anyone who wishes to divert attention away from the top will likely claim that it resides in numbers, at the bottom. Appealing to legitimacy-from-below is a major tactic used by politicians, who present their governments as reflecting the will of the people, with industry following suit. Rather than admitting to their own interests, banks and fintech companies present the decline of cash as a bottom-up phenomenon driven by popular support. In this view, HSBC’s decision to close ATMs must simply reflect the fact that ordinary people no longer care for cash. In this view, industry simply responds to our demands.

Big firms turn to freemarket doctrine in these situations, which maintains that businesses survive only if they mould themselves to our needs. So the presence of thriving corporations can indicate only that they’re serving us well. Left-wing thinkers reject this freemarket dogma, pointing out that some industries are powerful enough to effectively legislate the conditions of our lives. We all know that firms invest heavily in warping our perceptions via marketing, and often secure our consent only through tricks and misrepresentation. Left-wing calls for government regulation in turn compel freemarketeers to accuse them of stifling both popular will and business. Market conservatives paint a picture of consumers, workers and small entrepreneurs battling the clumsy state, while Lefties present workers, citizens and mom-and-pop shops fighting the corporate behemoths. Economic politics is all about painting these contrasting David-and-Goliath options.

When it comes to money, though, the battle lines get more confusing, because the monetary system is a public-private hybrid . Physical cash is government money, but it has properties – like anonymity – that appeal to some anti-government libertarians. Privacy-invading card-payment systems, by contrast, have historically been run by the private sector, so those pro-business libertarians who are concerned by surveillance are forced to accuse banks of being phoney ‘crony capitalists’ collaborating with controlling governments.

This collaboration can be seen in the case of the 2022 anti-vax ‘Freedom Convoy’ truckers, whose bank accounts were frozen by a Canadian government order. Libertarians rallied in support of the truckers, but there’s many variations of these alliances between states and payments firms. For example, the US government agency USAID has funded programmes like Catalyst: Inclusive Cashless Payment Partnership, pushing Visa as a tool of empowerment in India. In its 2017 annual report , Visa talks about doubling its market penetration into India after it ‘worked closely’ with Narendra Modi’s government in its ‘demonetisation’ efforts in 2016, during which time certain banknotes were outlawed. The Indian prime minister’s open attacks on the public cash system also drew fawning praise from Indian digital-payments firms.

I t’s easy to get stuck in a binary of explaining cashless society as either a bottom-up phenomenon demanded by us, or a top-down enclosure pushed by power players. The reality is a more complex mix. Because at scale it’s cheaper to push billions of people through a handful of centralised players, almost every industry in the world is dominated by oligopolies of large firms. Those firms will inevitably build political connections, while smaller firms get relegated to the periphery. Oligopolistic firms fluctuate between collaboration and competition, but the evolutionary logic of our economic system is always towards greater automation. Corporate executives benefit if they nudge everyone in this direction, and they have a niggling insecurity that, if they don’t, competitors will leave them behind. The problem is that many people don’t love digital acceleration, and it takes a considerable effort over time to erode their resistance. This is why big retailers like Tesco start by tentatively testing cashless stores in certain locations to set a precedent. It took years for the airline industry to make it feel ‘normal’ to refuse cash, but that norm is still not universal. Even last year, I found myself seated next to a man on a flight who was humiliated and flustered when the attendants refused his banknote.

The man wasn’t a frequent flyer and came from a working-class background, pointing toward an important fact: when a capitalist system is resetting to a state of higher speed and automation, it often does so first through social elites. In London, a hipster barber targeting yuppies may very well refuse cash, but a hair salon targeting working-class immigrants will almost certainly ‘still’ take it. Words like ‘still’ are loaded, because they imply that whoever is still doing the thing has yet to go through some evolutionary upgrade.

Digital payments giants like Visa invest heavily in presenting ‘going cashless’ as a grassroots triumph for the small entrepreneur who wants to cut costs. In reality, this alliance between Big Finance/Big Tech and small and medium-sized enterprises applies only to businesses with middle-class customers. A decade ago, many of those customers didn’t even perceive cash as particularly inconvenient. Even now, they would prefer choice (the fact that I sometimes use my card doesn’t mean I asked a shop to remove its cash till). It’s businesses that remove our payments choice, but they rely on the fact that most middle-class people simply adapt their expectations and edit their memories to forget those old days when cash felt totally normal. Once new cultural norms are established, it compels compliance. Eventually, you get discriminated against if you insist on being that guy who complains that the London bar won’t accept your coins.

The fact that people fall into line and begin displaying a preference for card payments is read by politicians as a signal to support the transition. They too are worried about being ‘left behind’. This pressure to go along with the transnational automation drive means that the average UK Labour Party politician doesn’t challenge cashless society. Rather, they call for a slight slowdown in the imagined ‘race’ towards it, to give cash-dependent communities a chance to ‘catch up’.

Cashless pubs allow hundreds of unmasked people in while refusing cash to protect their employees

So, capitalism has inherent trends, but it also has inherent contradictions. Here’s one of them. Our cashless card payments rely upon ‘digital casino chips’ issued to us by banks, but – as anyone who has been to a casino knows – such chips have power only because you believe they can be redeemed for cash. In the total absence of cash, there could be a collapse in the public’s belief in bank-issued digital money. Banks and corporates make private decisions that erode our cash infrastructure, but in doing so they are undermining the public basis of confidence in their private systems.

This was accelerated by the outbreak of COVID-19, which gave companies a convenient cover to fast-track their automation plans. It’s easier for a retailer to announce they don’t accept cash because of COVID-19 than to admit that they’re trying to shave a percent off their costs. For example, Visa entered a deal with the US National Football League to promote cashless Super Bowls. Signed in 2019 and piloted in 2020, it went public in 2021 during the pandemic, with attendant media coverage presenting it as a measure of public hygiene. Cashless pubs in London allow hundreds of unmasked people in their establishments while claiming to refuse cash to protect their employees from any coronavirus that may be stuck to the notes (a contention that is scientifically inaccurate ).

In 2020, such scaremongering, along with the fact that so many of us were forced into online shopping during the pandemic, caused a precipitous drop in transactional cash use. This raised the possibility of a financial stability problem, because cash psychologically (and legally) backs our cashless digital casino chips. This puts central banks in a bind. They know that the trajectory leads to a crisis-prone bank-dominated version of cashless society. So they think about how to maintain public access to government money without upsetting the transnational automation agenda. One way they are trying to resolve this is with a new form of ‘digital cash’ – central bank digital currency (CBDC).

To understand CBDC, imagine being able to download a payments app on the iPhone App Store from your nation’s central bank (like the US Federal Reserve or the Bank of England). Various countries have appointed teams to experiment with this hypothetical government payment system, but it creates a new problem. In a country like the UK, a state-issued digital pound would upset banking giants like Barclays, Lloyds and HSBC. They would rightly perceive it as competition to their own digital money empires. Given that central banks are supposed to maintain the stability of private banks, rather than directly compete with them, the Bank of England (and all other central banks) will have to make concessions: any future CBDC will be watered down to prevent disruption to the banking sector, and its operation will be outsourced to private partners… like the banks themselves.

I n 2015, I was one of the few people raising awareness of the dangers of cashless society from a Left-wing perspective. Then the pandemic hit, and a new generation of pro-cash activism emerged in the so-called populist Right. Libertarians seized upon early COVID-19 controls as evidence of a new era in totalitarianism. Social conservatives had already cast Big Tech firms as hives of ‘wokeness’. Conservative commentators began to weave these perspectives together. They presented themselves as rebellious champions protecting the everyman from an alliance of liberal corporate elites and authoritarian socialist governments.

In May 2020, my mother was sent a video by her friend on Facebook. It claimed that Bill Gates had orchestrated COVID-19 to microchip us via vaccines and to usher in a cashless society where our every economic move could be monitored. Her friend was very excited to announce that ‘Your son is in this! You must be so proud.’ Sure enough, there was a clip of me (used without my permission), in which I was describing how financial institutions engage in a war on cash. It was followed by a clip of an evangelical pastor warning that ‘the Bible clearly links the mark of the beast with the emergence of a cashless society’.

How is it that I end up in a video like this? Conspiracy theorists happily take my work out of context in order to push their version of events. Rather than analysing the logic of capitalism, many of them have decided that behind digital innovation-speak lie satanic overlords, paedophiles, Marxists, Jews or caricatured banksters smoking cigars.

Ironically, it’s central banks’ response to the corporate attack on cash that has really spurred the new wave of pro-cash activism. The possibility of a state-controlled digital pound or digital euro replacing the battered cash system has galvanised the imagination of libertarian activists. Libertarians have always faced a tension when complaining about the surveillance that accompanies cashless society. This is because digital payment systems are pushed by private sector fintech entrepreneurs, and libertarians are supposed to be pro-entrepreneurialism. CBDC has enabled them to escape this bind. It allows them to rework the story of cashless society as being driven by an oppressive digital state.

These systems limit choice, and can be used to push people’s business to big retailers, rather than small ones

This mutated version of the cashless society story is now spreading virally. My dad recently forwarded me a video, which he received on WhatsApp, about the looming spectre of CBDC. The anonymous producers stitched together clips from libertarian activists, self-help gurus and even the populist UK politician Nigel Farage, all of whom cast CBDC as a new form of digital totalitarianism. They argued that this centralised digital money will be sold to us under the banner of convenience, but that the true agenda is to enable governments to micromanage us by controlling our payments. The conclusion? Say no to CBDC. Say yes to physical cash.

They’re not wrong to point out the dangers of digital control, but their selective curation of the form and examples misrepresents why it is happening and how to oppose it. The cashless system is run by transnational corporations, and the actually existing examples of payments control often concern welfare recipients: for instance, the Australian ‘cashless welfare card’ was a Visa card system that blocked Indigenous Australians on benefits from buying non-approved goods in non-approved stores. These systems not only limit choice, but can be used to push people’s business to big retailers, rather than small ones.

Farage and his contemporaries don’t focus on the payments censorship of Indigenous welfare recipients. They fixate on conservative fears, like the hypothetical blocking of transactions for guns and meat. This is causing me problems, because moderate progressives – who previously would have expressed some concern about corporate power – have started associating a pro-cash stance with reactionaries, and to a broader suite of ideas that they espouse. In Germany, I’ve even been accused of being aligned with the neo-Nazi Reichsbürger movement, purely on the basis that they too are pro-cash. I’ve seen digital payments promoters use this disorientation to their advantage. They can suggest that critiques of their industry are the realm of crackpot antisemites. If conspiracy theorists are the ones leading the charge against digitisation, surely it must show the concern is built from the wild fantasies of paranoid flat-Earthers. Rather than fight cashless society, then, they suggest we should promote corporate financial inclusion : give a helping hand to all those people who have yet to be absorbed into Big Finance. Get them accounts. Help them become corporate consumers.

Moderate progressives are often taken in by this story and in backing away from the cashless society battle they cede territory to the far Right. It’s an example of a trend in our post-pandemic moment, where the meeting of two sides of the political horseshoe has led to the spread of Right-wing ideas among people who previously considered themselves Leftists. The new Right has appropriated the rebellious language of Left-wing hacker culture, which pushed digital privacy for decades (for a pop-culture version of this, watch the TV series Mr. Robot , in which anti-capitalist hackers target the corporate giant ‘Evil Corp’). Top-down power has been re-ascribed to a generic blob of ‘globalists’, acting via institutions like the World Economic Forum (WEF), but anti-WEF campaigning was a standard part of Left-wing culture in the 1990s and ’00s. To Left-wingers, the WEF represented venal corporate capitalists, which is why the ‘alter-globalisation’ movement championed the World Social Forum as an alternative. In the midst of lockdowns, however, it was anti-mask and anti-vax campaigners who took on the aesthetics of Occupy Wall Street, holding street protests with placards warning about cashless society and digital ID.

A surreal twilight zone has formed between the language of the old Left and that of the populist Right, and into it has stepped a character like Russell Brand. In 2013, he came out as an anti-corporate socialist and, back then, every Lefty activist I knew was clamouring to find his email address in the hope that he’d platform their cause. Fast-forward several years, and he renamed his podcast to Stay Free, peppering it with libertarian language and topics that appeal to the Right. He presents himself as being on an open-minded search for the truth that the mainstream media won’t tell us, and it increasingly involves him having discussions with conservative edge-lords. In November 2022, he released an obligatory video about CBDCs, entitled ‘Oh Sh*t, It’s REALLY Happening’.

Notably, no cashless establishments use CBDC, because it doesn’t exist yet. They all use the private sector digital payments system but, in choosing to focus on the fantasy version of cashless society, rather than the actual one, Brand signals that his allegiance lies with the Right wing.

I n the martial arts classic Kill Bill: Vol 2 (2004), the five-point palm exploding-heart technique is a precise sequence of five hits that cause an opponent’s heart to stop. In the conspiracy world, the five-point punch of the globalists involves them hitting us with digital IDs, 5G technology, vaccines, COVID-19 passports and now CBDCs. This is supposed to trigger a global cardiac arrest called the ‘Great Reset’. The Great Reset is actually the name of a real programme convened by the WEF, in which they talk about the need for a post-pandemic digital and green transition. Those goals emerge from different sources because, while capitalism generates a digitisation agenda to speed things up, it doesn’t generate a conservation impulse to slow things down. Green transition rhetoric doesn’t emerge from market processes: it’s the result of decades of relentless campaigning from civil society groups, who pushed past the lobbying of the fossil fuel industry to showcase the economic risks of climate change. Big business and politicians now pay lip service to that.

Nevertheless, they attempt to subordinate it to their automation fixation by proposing digital techno-fixes for climate change. This is a gift to our conspiracy theorists. They can now present CBDCs as being a future tool to force us to buy only low-carbon vegan sausages, under the control of Greta Thunberg and the Bank for International Settlements (a BIS v ideo about CBDC is a favourite among them).

An anti-cashless society propaganda leaflet. Supplied by the author

Cashless society authentically sucks. It’s a world where your kid cannot sell lemonade on the side of the road without paying Mastercard executives in New York. It’s an attack on privacy, autonomy, local independence and casual informal interactions in favour of surveillance, dependence and centralisation of power in large institutions. I frequently interact with people who have very real concerns about it, but who – like our 17th-century folk who lost loved ones to a storm – have been steered into reactionary ideas about it. Our struggle to see large-scale systemic processes gives oxygen to conspiracy theorists. I frequently get asked to go on Right-wing media channels, such as GB News, to be interviewed by anti-woke libertarians or Christian evangelists. Many of them imagine capitalism to be the realm of the small individual, and present elites as being malevolent actors who attack the system from above. It’s an easy story to tell. But the reality is that elites are a by-product of our system. The invisible hand likes tapping the contactless card, regardless of whether you as an individual do, and the role of the elites in the war on cash is to simply unblock resistance to that. More often than not, they’re examples of Hannah Arendt’s banality of evil . They’re just people ‘doing their job’, serving a system that wants to commodify any aspect of our lives that remains un-commodified and un-automated.

The dominant tendencies in capitalism pull upon all of us but it’s possible to demand space for other values. It’s been done before. There was a time when the automobile industry seemed ascendant, and bikes were pushed off the roads, but we built a cultural movement to demand bicycle lanes. That’s why we should see cash as being like the public bicycle of payments, and support efforts across the political spectrum to protect and promote it. Digital bank systems are the private Uber of payments: they may appear convenient, but total Uberisation unleashes demons that cash historically kept in check – surveillance, censorship, digital exclusion, and serious resilience and financial stability problems. The point isn’t to argue that everyone must always use the ‘bicycle’. It’s to ensure that we don’t get totally ‘Uberised’ in private and public life. We need to promote a healthy balance of power between different forms of money in the system, and that’s within our collective political abilities.

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The Consequences of Moving to a Cashless Society Essay

Introduction, literature review.

In a world where we can instantly transfer money with the tap of a button, it’s hard to imagine a future without cash. But what would a cashless society look like? A cashless society is one where people no longer use physical currency but instead use electronic methods of payment such as credit cards, debit cards, and mobile payments. This shift has been slowly occurring for several decades now, as technology has made non-cash payments more convenient and widespread. For instance, in Sweden, cash is used in only 3% of all transactions (Hasan, et al., 2020). A cashless society is more efficient because it reduces the need to print and distribute paper money. It lowers crime by making it more difficult to commit fraud or theft when there is no cash involved. Additionally, it can reduce corruption because it is more challenging to bribe someone when all transactions are electronic and traceable.

On the other hand, there are some drawbacks associated with a cashless society. One, it is difficult for unbanked or underbanked people to participate in such an economy. Additionally, it can be harder to anonymously donate to charities or to engage in other types of transactions that one might not want a paper trail for. The decision of whether or not to move to a cashless society is a complex one, with several pros and cons to consider. Ultimately, the decision will come down to weighing the advantages and disadvantages of such a move. This essay explores the positive and negative implications of a cashless economy for society.

The consequences of moving to a cashless society are still being debated by experts. Some argue that it could lead to negative effects, such as turning citizens into criminals, while others believe that the benefits outweigh the risks. However, there is still a lack of consensus on the issue. Taskinsoy (2020) argues that the move towards a cashless society is being accelerated by the global lockdown caused by the novel coronavirus. This is because people are now relying more on online transactions and digital payments. Rivera (2019); Engert (2018) warned of the potential negative effects of a cashless society, such as making it easier for the government to track citizens and turning them into criminals if they are unable to pay their debts.

A cashless economy is more efficient and transparent but can contribute to more crime. It is easier to launder money through cashless means, as opposed to physical cash (Rivera, 2019). However, Alaeddin (2019) disagrees with the views of other studies, claiming that society could be less corrupt if the cashless means are fully installed, as it would be more difficult to hide or launder money.

One of the main benefits of a cashless economy is increased efficiency. This is because cashless transactions are often faster and more convenient than traditional methods. For example, when you use a credit or debit card to pay for something, you don’t have to count out the exact change or wait for the other person to count it (Jain & Jain, 2017). This can save a lot of time, especially in busy situations. In addition, cashless transactions can be done online or over the phone, which is very convenient for both businesses and customers.

There is the assurance of more security with a cashless economy compared to physical cash. With electronic payments, there is no risk of theft or loss of cash (Jain & Jain, 2017). In addition, electronic payments are more difficult to forge than paper money. With electronic payments, there is a transparent record of all transactions which can be easily traced. This makes it more difficult for corrupt officials to pocket public funds.

Another advantage of a cashless economy is increased efficiency. Electronic payments are faster than cash payments, and they can be made online or in person, making them more flexible. In addition, electronic payments can be made 24 hours a day, 7 days a week (Hasan et al, 2020) This allows businesses to accept payments at any time, and it also allows consumers to make payments when it is convenient for them.

The increased transparency that comes with electronic payments can help to prevent corruption and fraud. By being able to track and trace all transactions, businesses, and government agencies can see where money is going and how it is being used. This makes it more difficult for corrupt officials to pocket funds or funnel money into illicit activities (Fujiki, 2020). Additionally, it becomes easier to identify and investigate fraudulent activities when all transactions are recorded and available for review. Electronic payments can therefore help to create a more accountable and transparent system, making it more difficult for corruption and fraud to go undetected.

There are also some disadvantages to a cashless society. One of the biggest disadvantages is that a cashless economy can be exclusionary. This is because not everyone has access to electronic payment methods and the Internet, which is central to the use of cashless techniques (Liu, 2021). This can exclude certain groups of people, such as the elderly, the poor, and rural populations. In addition, a cashless economy can be vulnerable to cyberattacks. Hackers can target electronic payment systems and steal people’s money (Seshan, 2019). A cashless economy can lead to higher prices. This is because businesses can charge higher prices for goods and services when they don’t have to accept cash.

Fujiki (2020) examines the use of noncash payment methods in Japan. He finds that the use of noncash payment methods has increased in recent years, but that cash is still widely used for regular payments. He argues that the demand for cash is likely to decline in the future as more people use electronic payment methods (Maurya, 2019). Most people are willing to use digital payment systems, but there are some concerns about security and privacy. Liu (2021), argued that governments should take steps to address these concerns to promote the use of digital payment systems. A cash-free society would be more convenient, but the government and organizations providing such services should ensure its security and access to all.

The first-hand survey I conducted through questionnaires, established that more people believe in a future dominated by non-cash payment techniques. More than 80% of the participants in the questionnaires reported finding it safer to use cashless means to make business transactions. Moreover, more people claimed to better manage and trace their use of finances with cashless techniques, as they can refer to their transactions whenever needed. This is difficult to achieve with cash payments. However, some people reported encounters with fraudsters, who managed to steal from them. Despite this, they claimed to have physical cash was more unsafe than electronic money.

A cashless economy can have several benefits, such as increased efficiency and transparency. However, some drawbacks should be considered, such as the exclusion of those without access to electronic payment methods or the internet, and vulnerability to cyberattacks. Additionally, prices for goods and services could potentially increase in a cashless economy. Further research could explore the potential impacts of a cashless society on different groups of people. For instance, the researchers could examine how a cashless economy would impact the elderly, the poor, and rural populations. Additionally, the research could explore how a cashless economy would impact businesses, and whether or not prices would increase for goods and services. Ultimately, the decision of whether or not to move to a cashless society is a complex one, with several pros and cons to consider.

Alaeddin, O., Altounjy, R., Abdullah, N., Zainudin, Z., & Hallak Kantakji, M. (2019). The future of corruption in the era of a cashless society. Humanities & Social Sciences Reviews , 7 (2), 454–458.

Engert, W., Fung, B. S. C., & Hendry, S. (2018). Is a cashless society problematic? [PDF document].

Fujiki, H. (2020). The use of noncash payment methods for regular payments and the household demand for cash: Evidence from Japan. The Japanese Economic Review , 71 (4), 719–765.

Hasan, A., Atif Aman, M., & Ashraf Ali, M. (2020). Cashless economy in India: Challenges ahead. Shanlax International Journal of Commerce , 8 (1), 21–30.

Jain, V., & Jain, P. (2017). A journey towards a cashless society. Banking Sector in Oman: Strategic Issues, Challenges and Future Scenarios , 17 (5), 61-73. Web.

Liu, W. (2021). Digital payments. Singapore University of Social Sciences – World Scientific Future Economy Series , 105–119.

Maurya, P. (2019). Cashless economy and digitalization . Proceedings of 10th International Conference on Digital Strategies for Organizational Success .

Rivera, J. W. (2019). Potential negative effects of a cashless society. Journal of Money Laundering Control , 22 (2), 350–358.

Seshan, R. (2019). Cashless economy or value for money. In Deyell, J. & Mukherjee, R. (eds.) From Mountain Fastness to Coastal Kingdoms (pp. 127–138). Routledge.

Taskinsoy, J. (2020). A move towards a cashless society accelerates with the novel coronavirus-induced global lockdown [PDF document].

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IvyPanda. (2023, August 14). The Consequences of Moving to a Cashless Society. https://ivypanda.com/essays/the-consequences-of-moving-to-a-cashless-society/

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IvyPanda . 2023. "The Consequences of Moving to a Cashless Society." August 14, 2023. https://ivypanda.com/essays/the-consequences-of-moving-to-a-cashless-society/.

1. IvyPanda . "The Consequences of Moving to a Cashless Society." August 14, 2023. https://ivypanda.com/essays/the-consequences-of-moving-to-a-cashless-society/.

Bibliography

IvyPanda . "The Consequences of Moving to a Cashless Society." August 14, 2023. https://ivypanda.com/essays/the-consequences-of-moving-to-a-cashless-society/.

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The Pros And Cons Of Moving Toward A Cashless Society

NPR's Mary Louise Kelly speaks with economist Kenneth Rogoff about what would happen if the U.S. were to get rid of a lot of its paper currency, particularly larger bills, as he advocates.

MARY LOUISE KELLY, HOST:

More and more of us are finding more and more ways to buy, sell and store our money, but about 70 percent of Americans still use paper money on a weekly basis. Harvard economist Ken Rogoff does not want to get rid of cash, but he does see problems with it. So we called him to ask why and ask what getting rid of cash would mean to our society.

Professor Rogoff, hey there.

KEN ROGOFF: Greetings.

KELLY: Greetings to you. So as we just heard from that 70 percent figure, a lot of us still like cash. You can touch it. It's easy. You don't like cash. Why not?

ROGOFF: Well, what I object to is people buying apartments in Trump Tower with suitcases of cash, buying $50,000 cars, engaged, of course, in drug transactions, human trafficking, whatever. A lot of people have perfectly healthy, good uses for cash. I have no moral objections to it. And I think for small transactions, it's still a big deal.

KELLY: Yeah. You can't tip your housekeeper at a hotel if you don't have, you know, five bucks on hand or 20 bucks or whatever. You can't do it with a debit card.

ROGOFF: Not in our country, anyway - in Sweden, maybe you can. But yes. But the question is, most of our cash is in $100 bills. And I don't know about you and your friends, but most of mine do not have $1,000 worth of $100 bills in their family of four. And that's really, I think, where a rethinking is needed.

KELLY: How much should we be worried about some Americans being left behind in a cashless society?

ROGOFF: If we literally go cashless, then obviously, it would be a problem. But I don't think anyone, even the Swedes, are talking about that. It's really reducing the amount of cash. By the way, something a number of countries have already done - and we should do - is give people free debit accounts. You could save a lot of money because most of the low-income people who'd be getting free debit accounts, the government's transferring money to anyway. And it's kind of expensive to process the checks.

KELLY: You mentioned Sweden. They are way farther along this path towards a cashless society than the U.S. is. We had a story out of Sweden recently on ALL THINGS CONSIDERED, where there were mixed views - some Swedes feeling like this is maybe going too far, too fast; others feeling like, what's the problem? - especially the younger generation. Do you think Sweden is where the U.S. is headed? Is that our future?

ROGOFF: We are already where Sweden was, say, five or seven years ago. And in another five or seven years, we will be where Sweden is today.

KELLY: Meaning what? How will our daily lives look different, do you think?

ROGOFF: Well, I already stand in line at Starbucks in Harvard Square. And when I get to the front of the line, I'm the only one using cash. I'm old. I still use it.

KELLY: (Laughter).

ROGOFF: I think it'll look more and more like that in many places.

KELLY: What should we be doing, as a society, to get ready for this other than - I don't know - charging up our Apple apps and our debit cards?

ROGOFF: Most people will be able to adjust at the pace that they want to. There are these new technologies that I can't even keep up with even though I work on the topic.

KELLY: Do you have a Venmo account, may I ask?

ROGOFF: My children do. I don't. Otherwise, they'd want me to Venmo them money all the time.

ROGOFF: I think we have to, say, coordinate state regulation.

ROGOFF: There has to be views about how big cash transactions should be. The U.S. is really trailing a lot of the rest of the world in getting around to this.

KELLY: Yeah.

ROGOFF: But by and large, technology will play out and will adjust. It won't be as fast as people think. And by the way, I don't believe it'll be cryptocurrencies. I think it'll be simpler digital mechanisms. There are some vulnerabilities we need to cover - like cybersecurity. We're there already on having to worry about that. But I think we are headed to a less-cash society whether people want to recognize it or not.

KELLY: Ken Rogoff is an economics professor at Harvard and author of "The Curse Of Cash."

Professor Rogoff, thank you.

ROGOFF: Thank you for having me.

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A Cashless Society: Facts and Issues

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• First Online: 03 November 2022

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• Yukinobu Kitamura 3  

Part of the book series: Hitotsubashi University IER Economic Research Series ((HUIERS,volume 48))

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In this chapter, I would like to describe my views on the development of a cashless society. We will first examine statistics related to cashless payments. When calculated to include bank transfers/account transfers, the cashless payment ratio reaches as high as 92% in Japan, which is not a low figure even among developed countries.

With regard to the choice of payment method, empirical studies and observed facts indicate that the cost structure is much more complex than the cost function considered by economic theorists, and that there are differences among retailers in their attitudes toward pricing and discounts.

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7.1 Introduction

In this chapter, I would like to describe my views on the development of a cashless society. We will first examine statistics related to cashless payments. The cashless payment ratio presented by the Japanese government represents the ratio of the amount paid with credit cards, electronic money, and debit cards to the amount of private final consumption expenditure, and it has been pointed out that the value of this ratio in Japan was 18.2% in 2015, which was quite low among developed countries. However, this statistic does not include bank transfers/account transfers and other electronic payments that households and businesses use on a daily basis, and is not considered to be a useful statistic when considering a cashless society. When recalculated to include bank transfers/account transfers, the cashless payment ratio reaches as high as 92% in Japan, which is not a low figure even among developed countries.

With regard to the choice of payment method, empirical studies and observed facts indicate that the cost structure is much more complex than the cost function considered by economic theorists, and that there are differences among retailers in their attitudes toward pricing and discounts. It is also clear that retailers have different attitudes toward pricing and discounting, and that the fact that cash payments are still used to some extent may reflect the preferences of retailers as well as consumers.

With regard to the merits of going cashless, most of the issues discussed are based on the assumption that cash will be abolished, and do not identify the advantages of going cashless while maintaining cash. At the same time, the disadvantages also relate to special cases where cash payments are rejected and the scale and immediacy of crime in cyberspace compared to cash, and do not discuss the disadvantages created by cashlessness itself.

As for policy issues, we discuss measures that will lead to the realization of a cashless society, including the creation of a system and the fostering of a competitive environment for businesses to increase the quality and diversity of their payment methods, and the promotion of digitization, with the government taking the lead. The interpretation here is that a cashless society will emerge as a by-product of the industrial revolution that has been underway since the end of the twentieth century, centered on the development of information and communications.

7.2 Statistics Related to the Cashless System

Among some statistics that capture the reality of cashless payments, we discuss two indicators that we felt needed to be explained.

7.2.1 Cashless Payment Ratio

The Ministry of Economy, Trade and Industry's “Fin Tech Vision” defines the cashless payment ratio as the amount of cashless payments (payments made with credit cards, debit cards, and electronic money) as a percentage of private final consumption expenditure. In Japan, the ratio was 18.2% as of 2015, which is quite low, and the government set a numerical target (Key Performance Indicator: KPI) in its Future Investment Strategy 2017 to raise the ratio to around 40% over the next 10 years.

The figures and future numerical targets for the cashless payment ratio have been circulated through the mass media and other media, and there is a widespread perception that Japan is a cash-based society compared with other developed countries. However, we consider the progress of cashless society not only in terms of the quantitative aspect, such as the increase in the ratio of cashless payment methods used, but also in terms of qualitative improvements, such as the addition of new value that contributes to user convenience and the provision of payment methods at lower prices than in the past. Also, as Fuchida ( 2018 ) writes, the cashless payment ratio set as a KPI in the “Future Investment Strategy 2017” ignores traditional electronic payment methods such as bank transfers, automatic deductions, and account transfers, and it does not include inter-personal transfers between mobile phones or Payment Initiation Service Provider (PISP)-type payments are also not considered. In order to take these points into account, we proposed to add the share of bank transfers/account transfers in private final consumption expenditure.

However, it should be noted that transfers/account transfers include direct debits related to the use of credit cards and so on, thus simply adding them up may result in double counting. Here, we assume that all credit card payments are included in transfers/account transfers, and recalculate the ratio of cash and cashless payments, which were 8 versus 92% in 2015 data. This means that electronic payments accounted for 92% of the total, while cash payments accounted for less than 10%. At the same time, a recalculation of the same data for Germany, which was identified as having a lower cashless payment ratio than Japan, showed a ratio of 2.58 to 97.42%. According to this definition, Germany was even more cashless than Japan. Interestingly, the same recalculation for Singapore, which had the highest cashless payment ratio, showed that the ratio was 16.52 versus 83.48%, indicating that Singapore was lagging behind Japan and Germany in cashless payments. As for South Korea, which had a high cashless payment ratio of 90%, the ratio was 0.43 versus 99.57%, which means that the country had almost completely achieved cashless payments. This seems to be an overestimation of cashlessness, given the realities in South Korea. Furthermore, I think it is a matter of national accounts in China; the amount of credit card payments is more than twice as large as private final consumption expenditure. Whether this is because credit card payments include payments other than private final consumption expenditure or because private final consumption expenditure is underreported, cannot be determined for China, which is often mentioned as a country that is making progress in going cashless, strict international comparisons using statistics should be avoided (see Nakajima, 2017 ).

According to the Committee on Payments and Market Infrastructures (CPMI, 2016 , 2017 ) in BIS, the cashless payment ratio in Japan appears to have increased steadily from 14.3% in 2011 to 18.2% in 2015. However, if we recalculate the ratio to include bank transfers and direct debits, the ratio remains almost unchanged at 8.48 versus 91.52% in 2011.

So what is the reality? To give an overview of the flow of funds in the household sector in Japan, including my personal experience, most salaries and other income are paid by bank transfer. From this, monthly expenditures are made, but the majority of housing, utilities, transportation and communications, and education are paid by direct debit. Durable consumer goods such as clothing, footwear, furniture, and household goods are also likely to be paid for by credit card or other means of payment rather than cash. The only areas of household consumption that are likely to be paid for in cash are food, education and entertainment, health care, and others. The total share of these items is estimated to be about 50% of total expenditures at most.

As will be discussed later, the choice of means of payment differs according to the range of payments, with credit card payments and bank transfers/direct debits being chosen for high-value expenditures exceeding 10,000 yen, and electronic money being used more frequently in recent years for payments of 1,000 yen or less. Taking these factors into account, there is still a possibility that cash will be used for payments in the range between 1,000 yen and 10,000 yen. It is not surprising to consider this to be about 10% of total household spending.

In summary, the government's statistic that cash spending accounts for 80% of private final consumption expenditure, including households, does not reflect reality, and although individual differences may exist, it is thought that cash spending is at most 10%, with the remaining 90% being paid electronically.

This chapter is not interested only in retail payments in Japan, but also in trends in private (household and corporate) payments in the Japanese economy as a whole and the financial system's response to these trends. In particular, when considering the financial system's response, it is desirable to consider the entire payment system, including bank transfers and account transfers as an issue.

7.2.2 Ratio of Cash in Circulation to Nominal GDP

According to Bank of Japan ( 2017 ), the ratio of cash balances in circulation to nominal GDP was 19.4% in 2015, the highest among the CPMI member countries. The Bank's explanation for this high cash balance is as follows. (1) The demand for cash as a means of storing value is quite high, reflecting the high level of security in the country, the low level of counterfeit currency, the high level of public confidence in banknotes, and the low opportunity cost of holding cash due to low interest rates. (2) Cash is generally accepted as a means of payment. This is because cash is valued for its various characteristics, such as compulsory acceptability, general acceptability, finality, and anonymity.

As is a common problem in economics, it is impossible to explain economic variables that change over time with constant institutions and characteristics. Please see Fig.  7.1 . In 1994, the ratio was 9.26%, which is not very high by international standards. It is not likely that the institutions and characteristics used by the BOJ to explain the ratio in Japan doubled between 1994 and 2016. It is unlikely.

Ratio of cash in circulation to nominal GDP (%)

Rather, the background here is probably that the Bank of Japan has continued monetary easing almost consistently and has increased the supply of currency (base money) at a pace faster than the rate of economic growth. I think there is a problem in linking this statistic to trends in the demand for currency by the private sector, including households, and the resulting slump in cashless payments.

7.3 Selecting a Payment Method

7.3.1 from the results of empirical research.

The choice of payment method depends on the size of the payment, and the main payment method is selected according to the size of the payment, as was established in an accumulation of theoretical and empirical studies in this area to date: Kitamura ( 2005 , 2010 ); a series of studies by the Bank of Canada (Bagnall et al., 2016 ; Kosse et al. 2017 ; Wakamori et al., 1998 ; Shy, 2001 ), and Garcia-Swartz et al. ( 2006a , 2006b ). Specifically, cash or electronic money is used for small payments of 1,000 yen or less, cash or debit cards for payments of 1,000 to 10,000 yen, credit cards for payments of 10,000 yen to 50,000 yen, and bank transfers for payments of 50,000 yen or more. In terms of the scale of retail outlets, sales of 1,000 yen or less are mainly at convenience stores and station kiosks, sales of 1,000–10,000 yen are mainly at supermarkets and individual specialty retailers, purchases of 10,000–50,000 yen are at department stores. For purchases of more than 50,000 yen, it would be high-end consumer durables specialty stores and high-end service stores. Each retailer already offers a payment method that matches its own payment range. In other words, convenience stores and kiosks offer electronic money such as Suica, WAON and nanaco; supermarkets offer credit cards with low annual fees; and department stores offer membership cards with credit card functions that charge a modest annual fee and provide extensive customer service.

If the cashless society is to be further advanced, the remaining areas of cash settlement will be (1) substitution of electronic money and debit cards for payments of small changes of 1,000 yen or less, and (2) substitution of credit cards, debit cards, and electronic money for payments at supermarkets and specialty retailers of between 1,000 yen and 10,000 yen.

In fact, in this field as well, supermarket e-money has expanded its charge limit to 50,000 yen and is building a system capable of handling payments of 10,000 yen or less. In addition, Suica and PASMO, which are transportation-related e-money, are working to expand the range of settlement amounts by issuing higher-end cards with automatic balance recharging and credit functions.

As shown in Chap. 5 (originally in Kitamura et al., 2009 ), the frequency of use of small coins such as 1 yen and 5 yen is steadily decreasing with the advent of electronic money, and a coinless system for small coins is under way.

A series of empirical and simulation studies conducted by the Bank of Canada has shown that consumers have a preference for cash that cannot be explained by various costs. So what other factors might be at play here?

7.3.2 Incentives for Choosing Payment Methods

When looking at settlement costs, what is often overlooked are the points given to electronic money and credit cards. From a common sense perspective, this is a return for the savings in management, accounting, and transportation costs associated with cash when using electronic money or credit cards, and at the same time, it is part of a strategy to attract customers by giving them an incentive to continue using electronic money or credit cards. It is also thought to be part of a strategy to attract customers by giving them an incentive to continue using electronic money and credit cards.

On the other hand, credit cards also require retailers to pay a fee, so some offer discounts for cash payments. There are still some long-established sushi restaurants and traditional Japanese cuisine restaurants that only accept cash payment. It is still there.

In this way, the incentives for choosing a payment method vary and do not seem to have a structure that can be statistically lumped together. In addition, the idea that it is desirable for retailers to offer a variety of payment options to acquire customers is not necessarily an accepted idea.

Although bank transfers and account transfers are widely used, they should be available 24 h a day, 365 days a year for convenience, but this is not yet the case in Japan. The 24-h operation of ATMs is also common practice overseas, but this is also not available in many places in Japan.

In the past, banks were not allowed to issue credit cards, but their affiliates issued credit cards in cooperation with credit card brands (Visa, MasterCard, etc.). Even today, when banks are able to issue credit cards, they do so in cooperation with the major credit card brands. As a result, credit card operations and management decisions are based on the judgment of the credit card brands, and may not necessarily be in line with the realities of the Japanese retail industry. The number of credit cards issued in 2017 was 272.01 million, a penetration rate of about 2.6 cards per adult. The conditions for issuing (or obtaining) a credit card in Japan are considered to be looser than those in other countries, and the use of credit cards is increasing. The use of debit cards is limited due to the fact that the number of stores where they can be used is still small and the hours of availability are restricted.

Electronic money cannot be used internationally because it cannot be withdrawn in cash (only one-way charging of cash to electronic money) and its specifications are different from those of foreign electronic money. Cross-border payment is the issue of e-money and Central Bank Digital Currency (CBDC) to be determined in the near future. From the point of view of foreign travelers, there is also the inconvenience of not being able to use the e-money in Japan that they use in their home country.

As described above, the choice of payment method is not necessarily made under the same conditions, or on equal footing. As mentioned, there is a segregation of payment methods according to industry and payment scale, and it can be judged that cash payment is selected to some extent among them.

7.4 Advantages and Disadvantages of Going Cashless

A problem that sometimes arises in the implementation of economic policy is that in calculating the merits (benefits) and demerits (costs) of a policy, the merits are overestimated and the demerits are underestimated, only to realize the magnitude of the actual demerits after the policy is implemented.

The immediate prospect of a cashless society does not envisage a society in which the circulation of cash currency is completely eliminated. Many of the advantages of a cashless society that many commentators have highlighted, consciously or unconsciously, emphasize the cost-saving effects that would result if cash currency were completely abolished. Naturally, while maintaining cash currency, as we saw in Sect.  7.2 of this chapter, the policy goal is to reduce cash settlements from about 8% of total settlements to about 4%, and if private final consumption expenditure is set at 286 trillion yen in 2016, 4% of that is about 11 trillion yen. In other words, we should discuss the merits and demerits of shifting 11 trillion yen worth of cash payments to electronic payments. There is not much to be gained by discussing the issue too broadly, however.

7.4.1 Advantages of Going Cashless

Fuchida ( 2017 , 2018 ) and Nikkei MOOK ( 2018 ) enumerate the benefits of going cashless.

No cost for production and maintenance of coins and banknotes.

No cost for transportation and storage of cash.

Eliminates the hassle and cost of anti-counterfeiting measures.

Eliminates the public health problem of using coins and paper money.

Enables faster and more efficient transactions.

No need to queue up at a financial institution or ATM to withdraw cash.

Eliminates cash-related costs for financial institutions such as investing in and managing ATMs.

Fuchida also discusses the benefits that will ripple throughout the economy.

Shrinking the underground economy, criminal and terrorist financing, and tax evasion.

Promoting financial inclusion.

Of these advantages listed, (1), (2), (3), and (4) can be achieved if cash is completely abolished, but they do not apply as long as cash currency continues to be issued. As for (2), if the demand for cash declines and the amount in circulation decreases, the cost may be reduced accordingly. The extent to which the number of ATMs and the vehicles to transport cash will be reduced will depend on the amount of the decline in demand. As for (4), currencies are more contaminated by mold than usually thought, and the risk of a pandemic would decrease if the use of currencies declined. Japanese currency is updated relatively frequently, and I have not heard of any cases where it has served as a vector for epidemics.

One of the arguments for (5) is that it eliminates the need to exchange cash and the need to confirm and count amounts. In terms of finality of payment, there is no quicker means of payment than cash payment. Electronic payments, even with debit cards, are slower than hand-delivered cash. It is true, nonetheless, that the time and effort required to confirm and count cash can be reduced if electronic payments are used. The point in (6) is that travel time and waiting time can be eliminated. Even with electronic payments, it takes time to operate a computer terminal or mobile phone, and if the payment does not go well, the customer may have to go to a bank, so it is not possible to assume that alternative payment methods will not eliminate loss of time. (7) Also, as long as cash currency remains, there is a limit to the cost reduction. This is more likely to be brought about by the evolution of FinTech using artificial intelligence (AI) than by going cashless.

Points (8) and (9) have been cited as benefits, considered from an economy-wide perspective. The argument in (8) has been proposed by Rogoff (2017) and many other experts; but empirically, it is unclear to what extent the underground economy and crime would be reduced. Simply put, if there is a separate objective of tax evasion and crime in the underground economy, going cashless will only lead to flight to anonymous payment methods that are alternatives to cash. Public finance economists regularly measure the size of the underground economy, and Japan's underground economy is estimated to be less than 10% of GDP, which is considerably lower than that of other developed countries. The fact that there is little relationship between cash and crime is probably one of the reasons cash can be used with confidence. As for point (9), it has been widely confirmed that citizens of developing countries who had no contact with finance until now have been able to participate in many economic activities by acquiring payment functions through mobile phones. However, this is probably an issue that is not directly related to the cashless society as it happened, because the information and communication industry entered the payment business.

If we assume that cash will continue to exist, there will be additional costs to the existing cash management costs, such as infrastructure development and technology investment for cashless transactions. If we assume that cash will continue to exist, it would be correct to assume that there will be additional costs, such as infrastructure development and technological investment, to existing cash management costs. In this context, if cash management costs are reduced by progress in the shift to cashless transactions, and if there is still a surplus even after investing the extra funds in infrastructure and technology development for cashless transactions, then the shift to cashless transactions will continue. On the other hand, if cash management costs cannot be reduced to such an extent that the cost of additional capital investment becomes a burden, progress toward a cashless society may not be as rapid as it could be.

As we will discuss in Sect.  7.5 of this chapter, if we consider that the shift to a cashless society is a by-product of the evolution of AI and FinTech, particularly in financial institutions, it is difficult and too simplistic to merely compare cash management costs with capital investment costs for a cashless society.

7.4.2 Disadvantages of Going Cashless

When considering the advantages of going cashless, many argued that it would reduce the cost of maintaining cash. The disadvantages of going cashless are, of course, the inconvenience of suppressing the use of cash and the fact that the scale of theft is limited by the physical constraints of cash. With electronic money and virtual currency, theft on a large scale that is unthinkable with cash can, in principle, occur at once.

Some countries, such as Sweden, Denmark, the United Kingdom, and South Korea, have given some retailers the authority to refuse to accept payments in cash in order to promote cashless transactions. One can argue that such measures are necessary to some extent to promote a cashless society, but cash is the so-called last means of payment for those who are alienated from finance. Refusal of cash payment may be acceptable in clubs or schools where the members are fixed, but it is preferable not to allow refusal of cash payment in places where an unspecified number of people may carry out transactions.

To begin with, the government's “Strategy for the Revitalization of Japan, Revised 2014” stated that the government would “work to improve the convenience and efficiency of payments through the widespread use of cashless payments in light of the hosting of the 2020 Olympic and Paralympic Games in Tokyo and other events. In other words, the government's proposal to go cashless included the goal of making it more convenient for the rapidly growing number of anticipated foreign tourists.

In this light, we should not be so preoccupied with promoting a cashless society that we inconvenience not only domestic consumers but also foreign tourists in making payments. I myself have been refused cash payments in Denmark and the UK, but I managed to cope with the situation using a highly versatile credit card. In the trend of internationalization, the payment methods that are easy for foreign tourists to use are those that they use in their home countries (e.g., Alipay, Apple Pay, bank debit cards). In order to make these payment methods usable in Japan, it is necessary to create a mechanism to authenticate the payment methods in the Japanese payment system.

Japanese financial institutions are open to the idea of going cashless in the sense of replacing a portion of domestic cash payments with credit and debit card payments, or replacing cash by issuing privately issued digital currency using blockchain technology, but they are very cautious about allowing compatibility with electronic money and debit cards issued overseas. A delay in addressing this part of the problem could lead to the creation of a Galapagos-island-like cashless society specifically evolved only in Japan, which would indirectly exclude foreign travelers.

The other disadvantage is the security problem. On January 26, 2018, 0.5 billion cryptocurrency XEM (currency unit of NEM, equivalent to 58billion yen at market value) was stolen via on-line within ten minutes or so. At the end of March 2018, the entire amount 0.5 billion XEM was converted into other cryptocurrencies and ultimately into legal tender, and the culprit has yet to be caught. The theft of cryptocurrency has often occurred, but this was the first theft on this scale in history. Footnote 1

A robbery of this scale would not have happened in a cash-transport robbery. In other words, to transport 58 billion yen in cash at one time, a truck with a considerable transportation capacity, a considerable number of people, and a considerable amount of time are required, and it is almost impossible to do so without being noticed by a third party.

Coincheck, which was involved in the incident, was found to have a number of problems with its security management after the fact, and was given a business improvement order by the Financial Service Agency (FSA). The incident prompted a review of the FSA's response to the security management system for crypto-currency exchanges under the amended Funds Settlement Law, and on March 8, 2018, the FSA issued business improvement orders to seven exchanges, including Coincheck. Footnote 2

In contrast, debit cards, credit cards, and e-money are properly managed, and banks and other financial institutions may take the view that their security measures are perfect, but as with crypto-currencies, security problems occur where controls are weak. Specifically, there have been frequent incidents of credit card fraud through breaches of credit card information at the retail level. There is also no end to the number of elderly people who become victims of fraud through the use of counterfeit cards and lax cash-card authentication.

It is also impossible to assume that central banks are safe. In fact, although it is unclear how often crises that threaten the security of central banks occur, it seems that attempts are regularly made to use internal email information obtained through unauthorized access to send malware by impersonation.

On February 4, 2016, after business hours, hackers used malware to infiltrate the Bangladesh Central Bank's systems and, using a hijacked account, sent fake money transfer instructions to the Federal Reserve Bank of New York via SWIFT, successfully transferring funds to bank accounts in the Philippines and other locations. The total amount affected by the fraudulent remittance was $101 million, of which about $81 million (about ¥9.2 billion) has not been recovered. It has been reported that such crimes involving central banks have also occurred in Vietnam, Ecuador, and other countries, and the central banks and private banks of each country are required to share information and strengthen security.

As we have already seen, more than 90% of household payments are made electronically, and an even higher percentage of businesses rely on electronic payments. The reality is that cash holdings have been whittled down to a minimum, and the trend toward a cashless society is unlikely to stop. As a result, it is only natural that criminals will shift their focus from cash to electronic payments through the manipulation of digital information. Even if the government promotes the shift to cashless transactions, it should take sufficient security measures, recognizing that the risk will be exposed to consumers and retailers, who are the least security-conscious, and that criminals will exploit this risk.

7.5 Policy Issues

Japanese society is facing a variety of structural problems, including a declining birthrate, aging population, depopulation of rural areas, and difficulties in succeeding for individual businesses. At the same time, advances in information technology (IT) have led to the automatic accumulation of big data via the Internet, and AI has come to be used in the economy and society to replace human judgment through machine learning mechanisms such as deep learning. The financial industry is also being forced to change in the midst of this major historical trend, and the major megabanks are responding with a series of plans to close branches and cut staff.

A cashless society will inevitably emerge as part of the economic and social transformation. It is important to develop the infrastructure, including the legal system, and promote a competitive environment in order to achieve this. Moreover, a cashless society will emerge as a by-product of the industrial revolution centered on the broader development of information and communications, and the cashless society itself will not play a leading role, nor is it appropriate to set it as an independent policy goal.

I would like to point out two policy issues. First, an e-government system should be established as soon as possible to provide highly convenient administrative services and efficient administrative operations by digitizing government administrative procedures and settlements for tax payments, social insurance premiums, and pension benefits in an integrated manner. One of the reasons the Nordic countries are using personal identification numbers to make various administrative services online is to cope with their low population density relative to their land area. It is estimated that Japan's population will reach half of its current level (63.5 million people) around 2100, if demographic trends remain unchanged. It is difficult to imagine what will happen socio-economically if the population density is halved, but in Finland and Sweden, if you go out of the cities to the suburbs, you will find endless forests and lakes with hardly a soul in sight. In England and France, the winters are not so severe, so even if the population density is low, the land can be used as pasture or farmland. In Japan, however, there are many mountains, so the flat land is barely used as farmland, but the mountain forests are almost completely abandoned. In any case, it is almost certain that it will become impossible to provide the same level of administrative services as at present as the population continues to decline.

One of the most advanced examples is the digitization of the Estonian government, which has been introduced by Okina et al. ( 2017 , Chap. 16) and Arikivi and Maeda ( 2016 ). The Estonian government is trying to determine the extent to which the government can digitize the current situation, and this is possible because Estonia is a small country with a population of 1.3 million. However, compared to the current situation where only about 10% of the population has obtained a My Number card, even though the Japanese government has introduced a My Number card (i.e., National Identification Number Card in Japan), it seems a world away.

For example, it is said that more than 60 billion yen is currently required to hold each House of Representatives election. If this could be converted to online voting using the My Number system that each person has, the cost savings would be substantial. In the first place, if voting could be conducted with a fixed voting period, there would be no need to choose a specific voting date among various schedule adjustments. In many ways, e-government would allow for more agile government operations at less cost and with fewer people, but we must change the current situation, which has not even reached the stage of discussing the possibility.

Second, in connection with the shift to a cashless society, the question of what to do with the cash issued by central banks will also be unavoidable. As can be seen in Fig.  7.1 , the ratio of cash balances in circulation to nominal GDP has doubled over the past 20 years. Using the quantity theory of money, a rough estimate is that nominal GDP grew by only 7.6% over the 22 years from 1994 to 2016, while cash grew by 13%. If prices have not changed that much, it means the velocity of cash in circulation has halved. As the shift to cashless transactions progresses, the demand for currency for settlement reasons will decline, and we cannot deny the possibility that it is being held in reserve within households, corporations, and private financial institutions under zero (negative) interest rates. This means that the transmission mechanism of monetary policy is also undergoing a transformation.

The Bank of Japan (BOJ) has been pursuing quantitative and qualitative monetary easing since April 2013, but the reason the policy has not been effective is that there may be a discrepancy between the monetary policy tools chosen and the direction of the policy and the trend toward electronic finance and FinTech, as seen in the shift to cashless banking.

As we have seen in this chapter, more than 90% of total payments are made electronically, and if the cashless system continues to advance further, the demand for cash will decline. At present, no major country has decided to abolish the issuance of currency, but it is a natural progression to consider whether to gradually reduce the supply of cash and to issue the minimum necessary, or to circulate a central bank digital currency (CBDC) that can be used in cyberspace.

While Bitcoin and other crypto-currencies/assets have been pointed out as having problems, there is a growing recognition that they are innovations with potential for a variety of applications. Footnote 3

It is not the purpose of this chapter to discuss the future of money. I will only point out the following. As a researcher who has been thinking about this problem, I can say that it is more difficult than expected to devise a digital currency that can be easily carried around like paper money and yet be useful in cyberspace.

7.6 Conclusion

The choice of means of payment by economic agents should be left to the judgment of economic agents, not something that should be made a policy goal. If a particular technology or service is in its early stages and the government intends to foster it, it may be willing to protect or subsidize it for a certain period of time, but payments are already a mature technology, and cash has existed for more than 2,700 years or so.

There is no need for the government to provide incentives to promote a cashless society. In the first place, the act of payment itself is a means for the purpose of consumption of goods and services, not an end in itself. Cashless transactions are the result of the choice of payment methods. As electronic commerce expands further and retailers voluntarily introduce multi-payment functions, the shift to cashless transactions will naturally occur.

Rather, what is important is the argument that a cashless society will be born as a byproduct of the various IT and AI applications resulting from advances in information technology, as they become a response to structural problems such as the declining birthrate, aging population, and depopulation of rural areas.

As a technical response to structural problems, we should not forget that among the policy issues to be considered are also the issues of how to combine and implement policies (policy mix problem) and in what order (policy sequence problem). The private sector has had the unpleasant experience of becoming “Galapagosized”, being left behind by international competition and international standards, while being preoccupied with fighting for a small domestic market share in the name of competition policy. I hope that payment technology will not make the same mistake.

Initially, the NEM Foundation, the custodians of NEM, made an announcement to the effect that the leaked NEM could be automatically tracked by mosaic and that the perpetrators would not be able to redeem it; but in fact, by going through underground exchanges that could not be mosaicked (such as CoinPayments) In fact, they were exchanged. The NEM Foundation has also quickly abandoned its mosaic tracking system. Although crypto-currencies have been thought to be traceable because their transactions are public, this incident has shown that there is considerable demand for criminally involved crypto-currencies to be purchased in exchange for other crypto-currencies. If they could be obtained at low prices,, it became clear that the system would not work.

The security of the crypto-currency itself and the security of exchanges and exchangers are often discussed in a confused manner, but the security of the crypto-currency itself, which uses public key cryptography, and the security of the Internet environment of exchanges are two different issues. The hackers who stole the private key by breaking in through a lax security system have made it an urgent issue to strengthen the security of exchanges and exchangers.

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Kitamura, Y. (2022). A Cashless Society: Facts and Issues. In: Quest for Good Money. Hitotsubashi University IER Economic Research Series, vol 48. Springer, Singapore. https://doi.org/10.1007/978-981-19-5591-4_7

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Student Opinion

Should We All Go Cashless?

Do you still pay for things in cash? Or have you moved on to credit cards and digital payment apps? Will cash be someday obsolete?

By Jeremy Engle

Do you still like to pay for things in cash? Or do you prefer swiping a credit card, scanning your phone and making purchases with apps like Apple Pay, Venmo and Zelle?

Do you think paper money and coins will eventually go the way of the phone book and the VHS tape? Do you look forward to a world without cash?

In “ The Cost of Going Cashless ,” Pamela Paul, an Opinion columnist, writes about the often hidden downsides of life without cash. She begins with the story of how one ice cream business fought to make cash a thing of the past:

Six dollars and 50 cents is a lot to pay for a scoop of ice cream, no matter how artisanal. But that’s the cost at Van Leeuwen’s 20 ice cream shops in New York City. It’s especially egregious when you consider that a full pint of Van Leeuwen, which contains two and a half servings of ice cream, depending on your self-discipline, costs only a few dollars more. But some people haven’t been allowed to pay for Van Leeuwen’s ice cream, be it vegan or French, at all. For nearly two years after New York City banned retail stores from being cashless, Van Leeuwen shops in New York refused to comply . The company bore down on this defiance with a brazenness that felt almost ideological. Not only did signs warn customers that its stores did not take cash — until last month, when it finally acquiesced after threat of legal action — it violated the law at least 90 times and declined to show up for administrative hearings. The company also declined to respond to repeated requests for comment. “Nobody should be discriminated against because they only want to or can pay with cash,” Vilda Vera Mayuga, the commissioner of New York City’s Department of Consumer and Worker Protection, told me after Van Leeuwen finally conceded defeat. “It’s not for the business to decide who they want to serve.”

Ms. Paul overviews some of the benefits and beneficiaries of going cashless, as well as some of the not so apparent downsides:

Many people believe cashless is the wave of the future , citing Sweden as an example. Countries such as India and South Korea have also made a strong push toward a cash-free future. According to an analysis of sales data by the payment platform Square, the share of cashless businesses nearly doubled in the United States, the United Kingdom, Australia and Canada between February 2020 and February 2021; in the United States, cash payments dropped more than 8 percentage points in that period. And while the United States is far from the vanguard on going cash-free, here consumers use either credit or debit cards for 57 percent of transactions. As of 2022, 41 percent of Americans say they go cashless in a typical week, up from 24 percent in 2015. So who’s paying for all this? While cash-free means profits for credit card industries and efficiencies for merchants in terms of training workers and managing their time, it isn’t cost-free for everyone. One recent study found that merchants increase their prices by approximately 1.4 percent to offset the interchange fees they pay to credit card companies; for those earning miles, that may not matter — but those who pay cash pay the price. Moreover, many cashless venues use tablet payment systems that automatically ask consumers to tip for a retail service that was long standard. If you’re like me, that screen may leave you flummoxed: Are the workers being paid less than minimum wage because these are now tipped jobs? Will this barista think I’m a jerk for not tacking on 20 percent or 30 percent for a muffin? Consumers also pay in terms of privacy. Do you want your payment app or credit card company to share exactly how many beers or Big Macs you’ve bought in the past week with its data partners, or to know every item you picked up at the pharmacy? And while a cash system is subject to crime, like employee theft and robbery, digital payments aren’t without their own risks, including double charges and identity theft. But the most significant objection to a cashless system is whom it shuts out . Whereas cash enables everyone, no matter their age, credit history, immigration status or income, to pay directly for goods or services rather than use an intermediary, credit cards generally require a bank account. Not everyone — including 301,700 households , or almost one in 10 households in New York City — has one. And even those who do don’t necessarily want to add to their credit card debt. Regardless of whether they have a choice, teenagers and people earning less than $30,000 a year are more likely to use cash. This is also disproportionately true for minorities.

The essay ends:

Going cashless sounds so sleek and shiny and tech-forward, but like many high-tech initiatives, it doesn’t necessarily translate into progress for all. Given this country’s ongoing inflation, given the persistence of its profound wealth disparities, given the paycheck-to-paycheck lives of many Americans, widening another divide between the haves and the have-nots isn’t the cost-free leap forward proponents make it out to be. Someone always pays the price.

Students, read the entire article , then tell us:

How do you buy things? Do you still like to pay for things in cash? Or do you prefer to use digital services like Apple Pay, Venmo or Zelle? Tell us your favorite payment method and why.

Ms. Paul notes that, as of 2022, 41 percent of Americans say they go cashless in a typical week and that consumers use either credit or debit cards for 57 percent of transactions. Are you surprised by these findings? How do your buying habits compare to those of your peers or society as a whole? Is cash going out of style?

What are your thoughts and feelings about paper money and coins? Do you like having money you can touch and hold in your hand? Do you think having tangible currency teaches people — especially young people — to better understand and appreciate the value of money? Or do you think that a pocketful of grimy pennies and fading dollars is a quaint relic of the past, and that it is now time to embrace a cashless digital future? Should we all go cashless?

What do you see as the costs and possible downsides of a cashless society? Do you agree with Ms. Paul that “Someone always pays the price,” even if it might not be so apparent when you scan your phone to buy something quickly? How concerned should we be about the large profits enjoyed by banks and credit card companies, the privacy risks for consumers and the people who might be shut out of a cashless system, like immigrants or people without strong credit histories? How persuasive are Ms. Paul’s warnings about going cashless?

What’s your reaction to the case of Van Leeuwen’s ice cream detailed at the top of the essay? Should all businesses still have a cash option, even if many customers prefer to forgo it? Or should more places follow the lead of cities like Philadelphia, San Francisco and New York City and pass legislation forbidding merchants from refusing to accept cash?

Do you think we will ever live in a completely cash-free economy? If so, how soon might that happen?

Students 13 and older in the United States and Britain, and 16 and older elsewhere, are invited to comment. All comments are moderated by the Learning Network staff, but please keep in mind that once your comment is accepted, it will be made public.

Find more Student Opinion questions here. Teachers, check out this guide to learn how you can incorporate these prompts into your classroom.

Jeremy Engle joined The Learning Network as a staff editor in 2018 after spending more than 20 years as a classroom humanities and documentary-making teacher, professional developer and curriculum designer working with students and teachers across the country. More about Jeremy Engle

Loyola University > Center for Digital Ethics & Policy > Research & Initiatives > Essays > Archive > 2016 > Why a Cashless Society Should Scare You

Why a cashless society should scare you, july 28, 2016.

Thanks to the internet, smartphone apps and other technological advances, we seem to be headed in the direction of a cashless society in which physical currency is replaced completely by an internet connection and a bank account. For instance, I can pay my portion of a bar tab with my phone using the  payment-splitting app  Venmo. I can send friends money through PayPal’s website. I can even buy Cheez-Its at work sans cash, because there’s a credit card reader attached to the vending machine. Using near-field communication, the tech-savvy among us can breeze through the retail checkout process by  waving an Apple Smartwatch  or  Visa payWave credit card  over a contactless terminal.

All these innovations have happened in the past few decades. At this rate, could cash become completely obsolete in the near future? And is that a good thing?

To answer the first question: Certain cultures are certainly heading in that direction. A 2013 article on Swedish news site The Local  was headlined , “Swedes set for cashless future.” The article stated that only 27 percent of retail purchases involve cash (not including those made online), and some public buses in the country refuse paper money and coins altogether. Sweden’s central bank, the Riksbank, told The Local, “Neither retailers nor banks have any obligation to accept cash.”

Convenience-wise, a cashless society certainly sounds appealing (imagine a future with no dirty, wrinkled dollar bills or coins buried in the couch). Privacy-wise, it’s harder to say. Especially when you consider the existence of an electronic record of your most sensitive purchases, including items such as drugs.

One example: marijuana

On Oct. 1, 2015, recreational marijuana sales  became legal in Oregon . Hundreds of dispensaries sprouted up; they quickly  outnumbered  Oregon’s Starbucks and McDonald’s locations. It was a boon for small businesses—except  most banks  don’t allow dispensaries to open accounts. Banks fear losing their Federal Deposit Insurance Corporation insurance, as marijuana is still illegal at the federal level. That means  roughly 85  percent of Oregon’s dispensaries are cash-only. Many have ATMs inside, but that’s not the point. The point is someone at the federal level gets to decide marijuana is questionable even though  the majority of Americans disagree .

Immediately, troublesome implications come to mind about the potential difficulties for dispensary owners. What if dispensary owners want to apply for a loan or rent retail space, but have no way to prove their creditworthiness? Paper records only go so far. And it’s inconvenient for any business to have to deal solely in cash: Tracking transactions, managing payroll and doing taxes are difficult. As Oregon Sen. Ron Wyden  said  last year, “It is ridiculous to make any business owner carry duffel bags of cash just to pay their taxes.” Finally, there’s theft. As Jeffrey Stinson  wrote  for the Pew Charitable Trusts, “The abundance of cash makes … dispensaries tantalizing targets for criminals.”

These arguments for a cashless society may be compelling, but swapping cash for plastic presents privacy concerns for consumers. Currently, cash-only marijuana purchases mean that my bank–and anyone who hacks into my bank account or subpoenas my banking activity–doesn’t know if or when I buy marijuana. If society goes cashless, if I apply for a loan through a national bank, loan officers might not view those purchases favorably when considering how responsible, upstanding and financially prudent I am–even though purchasing marijuana is legal in my state. (Some lenders,  such as Earnest , don’t merely use your credit score to determine your creditworthiness; they also examine your purchase history.) So yes, marijuana dispensaries should not have to rely solely on cash, but consumers shouldn’t have to rely solely on debit and credit cards.

To put it plainly, most people probably don’t want their banks to know whenever they buy drugs. The minute Americans can purchase marijuana with credit or debit cards, other people will start making assumptions and judgments will start being used against them.

Your bank account tells all

In an imaginary future cashless society, it’s one thing for your bank to know your complete spending history. Unless you shun banks and get paid only in cash, your bank knows almost everything you buy already. But what happens when (as previously mentioned) someone subpoenas a record of your financial transactions to determine whether you deserve custody of your child? Or whether you’re a “suspicious character” and had motive to commit a crime? In a cashless society, activities such as gambling, going to a strip club and purchasing a counterfeit handbag lose their anonymity. Not only do banks gain knowledge of your every purchase, but they open the door for others to police your morality.

Sometimes this is a good thing, like with illegal activity. “A student at Columbia University was arrested and charged with five drug-related offenses, including possession with the intent to sell,”  wrote  Sarah Jeong for The Atlantic. “Supposedly, his fellow students and customers had paid him through the PayPal-owned smartphone app Venmo.” No matter how unmonitored they seem, most digital apps and payment systems aren’t anonymous. That’s good news for law enforcement and cases that are black and white, but what about the gray areas?

Who decides what’s unethical?

What if the morality of a situation is not as cut-and-dried? Who gets to decide that a legal purchase such as like purchasing marijuana in Oregon or tipping a stripper is unethical? What you and I may think is acceptable may be put in the same category as activities that are illegal and far less ethically ambiguous. For example, a recent initiative by the Department of Justice inadvertently grouped Ponzi schemes and adult entertainment together in the same category of suspicious, high-risk activity, despite their fundamental differences in legality.

Here’s the full story,  according to Sarah Jeong  in The Atlantic:  In 2013 , the Department of Justice launched an initiative called Operation Choke Point to crack down on high-interest payday loans. The DOJ asked banks to flag “high-risk activity.” In addition to guns, get-rich-quick schemes and pyramid schemes, other high-risk activities according to the FDIC included “tobacco sales, telemarketing, pornography, escort services, dating services, online gambling, coin dealers, cable-box descramblers, and ‘racist materials,’”  wrote  Jeong. As a result, banks stopped working with businesses that were actually legitimate,  concluded an investigation  by the U.S. House Committee on Oversight and Government Reform. As Jeong commented in her piece, “It’s strange to see a list of a handful of actually-illegal activities … alongside legal vices.” Indeed. While the goal of Operation Choke Point was to target exploitative payday lenders, not to serve as the morality police, the operation ended up revealing how easy it was to do the latter. In a cashless society, we lose the option to keep legal yet morally questionable purchases private, leaving others to label them as they will.

From hacking to hurricanes

Aside from concerns about privacy and morality, a cashless society is worrisome in light of threats such as fraud and natural disasters (two cases in which cash comes out on top).

Today, it’s arguably easier to open a fraudulent credit card in someone’s name than to snatch someone’s physical wallet; compare  326,000 reported robberies  in the United States in 2014 to  333,000 reported cases  of identity theft. And having your identity stolen is not merely annoying. “Identity theft is often committed to facilitate other crimes such as credit card fraud, document fraud, or employment fraud, which in turn can affect not only the nation’s economy but its security,”  noted  the Congressional Research Service. In contrast, cash is relatively secure, even if you don’t wear a wallet chain.

Plus, its liquidity makes it good for emergencies. Apps and online banking require not only power but also internet access. Should a large-scale natural disaster strike, no one will be taking Uber to the grocery store to buy flares with their debit card. Need a five-gallon jug of water? Don’t count on Amazon Prime.

Obviously, I’m not advocating draining your bank account and stashing all your money under your mattress. But as we slowly transition away from physical money, it’s worth first examining the sacrifices to our privacy, anonymity and security. Jeong warns, “[T]he cashless society offers the government entirely new forms of coercion, surveillance, and censorship.” Whether you care more about your freedom or your right to privacy, a cashless society should give us pause.

Holly Richmond is a Portland-based writer. You can learn more about Holly through her website .

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Essay on Cashless Society

Students are often asked to write an essay on Cashless Society in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Cashless Society

What is a cashless society.

A cashless society is one where people use cards or digital methods to pay instead of cash. Imagine buying a toy with a swipe of a card or a click on a phone, not using coins or paper money.

Benefits of Going Cashless

Paying without cash is quick and easy. It’s safer too, because you don’t have to carry money that can be lost or stolen. Shops like it as well because they don’t have to count cash or worry about theft.

Challenges of Cashless Payments

Not everyone can use cashless options. Some older folks might find it hard, and not all places have the machines for card payments. Also, if technology fails, we can’t buy things.

The Future of Money

More people are starting to pay with phones and cards. As technology gets better, even more will switch to cashless. But it’s important to make sure everyone can join in, no matter where they live or how old they are.

Also check:

• Advantages and Disadvantages of Cashless Society

250 Words Essay on Cashless Society

A cashless society is one where people use digital ways to pay, like cards or phones, instead of cash. Imagine buying a toy or a snack without using coins or paper money; that’s how a cashless society works.

Going cashless is handy. You don’t need to carry money around, which can be heavy or get lost. Paying with a card or phone is quick and can be safer too. You can also keep track of your spending easily when it’s all recorded digitally.

Challenges of a Cashless Society

Not everyone finds it easy to switch to digital payments. Some people, especially older ones, might find new technology tricky. Also, if there’s no electricity or the internet, digital payments can’t be made. This means some people could be left out, and not everyone can buy what they need.

What Does This Mean for the Future?

In the future, more places may stop accepting cash. This could mean new and better ways to pay will appear. But it’s important that everyone can use these methods. Making sure no one is left behind in a cashless society is something that needs careful planning.

A cashless society is growing, and it has many good points like ease and safety. Yet, it’s important to remember that not all people can join in easily. By thinking about these challenges, we can work towards a future where everyone can enjoy the benefits of going cashless.

500 Words Essay on Cashless Society

Imagine a world where you never have to carry money in your pocket. Instead, you pay for everything with a card, a phone, or even your watch. This is what we call a cashless society. In this kind of place, all money transactions happen electronically. People use debit cards, credit cards, mobile payments, and online banking to buy things and pay for services.

One of the biggest advantages of a cashless society is convenience. It’s much easier to tap your card or phone than to count coins and notes. Also, it’s safer because you don’t have to worry about losing your money or having it stolen. If you lose your card, you can quickly block it and protect your money.

Another good thing is that it’s cleaner. Money can pass through many hands and carry germs. When you pay without cash, you don’t have to touch money that others have touched. Also, it’s faster to make payments, which saves time for everyone.

Problems with a Cashless Society

Even though there are good things about not using cash, there are some problems too. Not everyone has access to the technology needed for cashless payments. Some people, especially older ones, might find it hard to use digital payments. Also, if the internet or power goes out, no one can buy anything or sell anything without cash.

Another issue is privacy. When you pay with cash, no one knows what you bought. But with digital payments, companies can track what you buy. This information can be used in ways that some people might not like.

How It Affects Different People

A cashless society affects people in different ways. For young people who are used to technology, it’s usually easy and fun. They enjoy the new ways of paying. But for people who don’t have smartphones or bank accounts, it can be tough. They might feel left out or have trouble buying what they need.

Businesses also have to change how they work. They need the right tools to accept digital payments. This can cost them money, but it can also help them sell more because it’s easier for customers to pay.

Looking to the Future

More and more, countries around the world are moving towards less cash. Some places like Sweden are almost there. In the future, we might see even more technology that makes paying for things even easier and more secure.

However, it’s important to make sure that everyone can join this cashless world. Governments and companies need to help people get the tools and skills they need to use digital money. Also, they need to make sure that the systems are safe and that people’s privacy is protected.

In conclusion, a cashless society has many benefits like being convenient, safe, and clean. But it also has challenges, such as making sure everyone can be a part of it and protecting privacy. As we move forward, we need to think about these things to make sure that going cashless is good for everyone.

That’s it! I hope the essay helped you.

If you’re looking for more, here are essays on other interesting topics:

• Essay on Cashless Economy Boon Or Bane
• Essay on Cash Flow
• Essay on Career

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• Cashless India Essay

An Introduction to Cashless India

A cashless India is the first step towards making the dream of digital India a reality. In this cashless India essay, we will be talking about the meaning of ‘cashless’, the different alternatives for our monetary system, and the disadvantages and advantages of a country going fully cashless and digital in its economy. The following cashless India essay in English is for students studying in class 5 and above. The language here has been kept simple for a better understanding of young students. This essay on the cashless economy in India would enable young students to write an essay on the cashless economy in India on their own. 

As we know that cashless India is the new India and with the decision made by our honourable prime minister to demonetize money used previously, this concept of going cashless has become very popular. Although there are some disadvantages of going cashless, along with that there are more benefits as well. In this essay, you will know about everything that will help you to get better information about the concept of India going cashless. 

Essay on Cashless India

On the evening of November 8, 2016, at 8 P.M., Narendra Modi, the Prime Minister of India announced the demonetization of 500 and 1000 rupees notes in India. That historic decision had many reasons. One of the reasons was laying the stepping stone towards the dream of a cashless India.

The traditional form of monetary transactions happens with the exchange of physical hard cash between people. Cashless India is going to make it almost redundant. This idea has got a huge amount of push due to the ongoing COVID-19 pandemic, given the concerns with the exchange of physical cash. There are a lot of advantages to going cashless. Remember that everything has a positive as well as a negative aspect. It is not that there won't be any disadvantages of going cashless but the thing is that you tend to find the ways by which you can prevent these disadvantages from harming you. All that you need to do is be more careful. As we all know, prevention is always better than cure.

First of all, let’s understand the meaning of a cashless economy. A cashless economy is one in which the liquid transactions through the system happen with the exchange of plastic currency or through digital currency. ATM debit and credit cards are plastic currency and online payments come under digital currency. The advent of blockchain technology has redefined the meaning of a cashless economy through bitcoins. A decentralized system of finance is defined by the concept of bitcoins, but we are not focusing on that in this particular essay on cashless India. We are more focused to discuss why India needs to go cashless and what are the benefits that will come with India taking on this new change. This essay provides you with information on the advantages and disadvantages of the digital payment system also. It is not that you are not going to face any problem in online transactions, you must have heard that a coin has two sides and just like that, this topic of cashless India also has both pros and cons. Let’s move on to the pros and cons of a digital payment system.

We can see the Three Main Advantages of Cashless India.

Reduction of Black Money

Black money is the money that is earned but not accounted for in taxes. That money is hidden by people from paying taxes. This black money is an illegal instrument in an economy that is capable of reducing a government down to bankruptcy. The cashless economy will ensure there’s no black money since unlike hard cash digital money cannot be hidden. At least there is no way yet that could make the hiding possible. Digital money enables governments to track all transactions in an economy that helps keep the income authentic and transparent. The technology behind the digital economy has to be well updated and sturdy though.

Transparency

India has corruption inbred in its system starting from the ministerial level to the watchman level. And it exists due to the lack of transparency in our monetary system. In an economy that is as big as India, transparency is a huge issue. We have learned of scandals like the CWG or 2g scams or the Rafale Jet scams over the years, and these scams are a result of the lack of transparency in transactions. It’s a shame that a small cashless economy in India essay would never do justice to the topic since it will never be enough to write about all of the corruption scandals India has had since its independence. Corruptions of this scale could be brought down to a large extent if we could achieve that dream of a cashless economy throughout. And it's possible because the origin and endpoint of a transaction could easily be tracked in a cashless economy and that’s the biggest advantage.

There are Two Major Disadvantages of Cashless India.

Online Theft

With the improving technology every day, there’s a rampant increase in online cheating and fraud episodes. If the government is unable to achieve sturdy and not-possible-to-hack digital systems, in a country like India with a 135 crore population, it is completely impossible to make the economy cashless. People are still afraid of making big transactions online after watching the reports of online thefts on national news channels.

Infrastructure, or the Lack of it

Not just the government infrastructure, it requires infrastructure on an individual level too. A gadget or a smartphone, data connectivity, and electricity for charging the phones regularly are the basic requirements for making online transactions possible. These are privileges that exist mostly in urban India and most of rural India is still deprived of these privileges. The government should first fix this before even dreaming of making a cashless India possible.

The Government of India took the whole country by storm by announcing the demonetization on 8th November 2016. 500- and 1000-rupees notes were no longer legal tender. This move was aimed at getting rid of the black money in the economy that was largely used to fund criminals and terrorists and formed a parallel economy. The acute shortage of cash led to long queues outside ATMs and banks trying to withdraw cash or exchange notes. This was all to initiate the fruition of a dream of cashless India.

With the enormous amount of technological revolutions happening, it is close to impossible to find people without a smartphone in these times. Almost every citizen possesses a smartphone. The ease of transaction through interfaces like GooglePay or PhonePe or Paytm has never been more seamless than this. The Indian government has also introduced interfaces like UPI or Unified Payments Interface for hassle-free digital transactions that are fully cashless.

In recent years, we have been asked to be in very less contact with each other. This is because of the communicable diseases of Covid-19 that have seen an adverse effect throughout India. For this reason, online payments have recently been the most popular means of transaction. The money will directly get transferred to the account of the user from our account; all you need to do is just download the app that you can use for the transaction. 

In the end, the demonetization step became crucial to start a cashless economy in the country. It has paved the way towards an economy in India that is defined by greater transparency and convenience and ease in monetary transactions.

FAQs on Cashless India Essay

1. Which Country is fully cashless?

There are a lot of benefits of going cashless and most of the benefits are discussed over here. Now the world is more focused on how to go cashless as they are well aware of the advantages that they will have after going cashless. This is the reason that most of the countries are seeking some changes and making constant efforts to make their country cashless. Going cashless will improve technologies and will also increase your economy. That is also one of the main reasons why this world is more focused on going cashless. Sweden could achieve a near cashless economy in the world.

2. Name the different Digital Currencies in the world?

Just as in terms of cash, we have rupees or dollars or pounds and so on. In the same way, it is not like only one kind of digital currency is used throughout the whole world. There are different kinds of currencies that the world uses for online transactions. Litecoin, Bitcoin, Ethereum are some of them that were found to be in existence as of 2020. You need to have good knowledge about these currencies and then you can easily transfer the money. 

3. What are the apps that you can use to transfer money directly into another person's account in India?

In India going cashless is the new normal. People are using online money apps such as Google pay, Paytm, Payz app, PhonePe to make the transactions directly through their phone and bank account but when we talk about the currencies being used currently, Indians are more preferably using bitcoins as their online currency. India is now making efforts to go cashless and increase its economy.

4. How much is India cashless now?

In recent years, at the time of Corona, it was advised to people not to make contact with each other. It was at that time that the cashless India concept was created and the apps like Google Pay etc came into existence. The app was introduced in India before it came into use. In the covid time, most people used the cashless way of payment. The census has proved that 37% of India has not paid using cash since the Corona times.

5. Is it possible to have cashless India anytime sooner?

Given the regency usage and increased usage of the apps such as Google pay and Paytm and the increase in the number of vendors who have accepted this method of online payment, the more India can be cashless. The most difficult thing will be to make the people of India agree to use these online methods of payment and move toward increasing the other economy of India. India too can be cashless; it is just that we need to create awareness among people regarding this.

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Moscow metro to be more tourist-friendly

A new floor sign system at the Moscow metro's Pushkinskaya station. Source: Vladimir Pesnya / RIA Novosti

For many years now, Moscow has lagged behind St. Petersburg when it comes to making life easy for tourists, especially where getting around the city is concerned. Whereas the northern capital installed English-language maps, signs and information points throughout its subway system in the late 2000s, the Russian capital’s metro remained a serious challenge for foreign visitors to navigate.

Recent visitors to Moscow may have noticed some signs that change is afoot, however. In many stations of the Moscow subway, signs have appeared on the floor – with large lettering in Russian and English – indicating the direction to follow in order to change lines. Previously, foreign visitors using the Moscow metro had to rely solely upon deciphering the Russian-language signs hanging from the ceilings.

Student volunteers help tourists find their way in Moscow

However, this new solution has a significant drawback. “The floor navigation is visible only to a small stream of people – fewer than three people per meter. During peak hours, this navigation will simply not be noticed,” said Konstantin Trofimenko, Director of the Center for Urban Transportation Studies.

One of the biggest problems for tourists in the Russian capital remains the absence of English translations of the names of subway stations in the station vestibules and on platforms. The Department of Transportation in Moscow has not commented yet as to when this problem will be solved. However, Latin transliterations of station names can already be found in the subway cars themselves.

Finding the right exit

At four of the central stations – Okhotny Ryad, Teatralnaya, Ploshchad Revolyutsii, Lubyanka and Kuznetsky Most – the city authorities have now installed colorful stands at the exits with schematic diagrams of the station’s concourse and surrounding area, which provide information about the main attractions and infrastructural facilities.

The schematic diagrams are the work of British specialists from the City ID and Billings Jackson Design firms, who have already implemented successful projects in New York and London.

According to Alexei Novichkov, expert at the Design Laboratory at the Higher School of Economics, the design of these information booths raises no objections: The color solutions, font, layout and icons are consistent with international standards.

However, the stands do have some shortcomings. “Many questions are raised about the fact that the developers of these maps did not apply orientation to the north, and have provided layouts of the surrounding areas with respect to the exits,” says Novichkov. “A system like that is used for road navigators, but most of the ‘paper’ guides and maps are oriented strictly to north. The subway map is also oriented to north, so people may become confused.”

Muscovites and foreign visitors are generally positive about these navigation elements, with most of them citing the numbered exits from the subway as the most useful feature.

The fact is that many Moscow subway stations have several exits. One of the busiest central stations of the Moscow subway in particular, Kitay-Gorod, has more than a dozen exits. Previously, these exits were differentiated from each other only with signs in Russian referring to the names of streets and places of interest to which they led – making it easy for tourists and those with poor navigation skills to get confused.

Now, when making an appointment to meet a friend, instead of struggling to find the right spot when they tell you: “I'll meet you at the exit to Solyanka Street,” you can just propose to meet under a specific exit number.

“I’ve lived in Moscow for seven years,” says Angelika, a designer from Voronezh, “but I still don’t always know where to go to find the place I need, so the new schematic diagrams will be very useful. Previously, some subway stations had maps, but not with so much detail.”

Teething problems

Foreigners, meanwhile, focus their attention on other elements. “It is good that the new information boards have QR-codes, which can be ‘read’ by smartphones,” says Florentina, a writer from Vienna. But there are also shortcomings. “The English font of the information on posters and in the captions to theaters and museums is too small – you have to come very close to see it well,” she says.

Pleasant encounters on the streets of Moscow

Florentina was also dissatisfied with the fact that such posters are not provided at all subway stations: “When I was trying to find Tsaritsyno Park (a museum and reserve in the south of Moscow) at a subway station with the same name, it turned out to be quite difficult,” she says.

“There are no maps with landmarks for other areas, such as those already in the city center. There were no clear pointers in the English language, and the passers-by I met did not speak in English, so they could not help me,” she adds.

Officials say that the navigation system is gradually being redeveloped and improved. According to Darya Chuvasheva, a press representative for the Department of Transport of Moscow, the introduction of a unified navigation system will take place in stages.

“By the end of 2014, the system will first appear on the first subway stations on the Circle Line. By the end of 2015, we plan to install the system at all major stopping points, subway stations and transport interchange hubs,” says Chuvasheva.

All rights reserved by Rossiyskaya Gazeta.

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When the landfill site is closed, discharge water filtration and clarification equipment is installed, the territory is covered with specific material and backfilled. Then many tubes used to purify gas are installed. The greatest danger in landfill restoration is the groundwater contamination. In and around Moscow there are a few dozens of waste deposits, some of which are growing higher than multistoried residential houses standing nearby.

During my work on the project, I visited 7 landfills in Moscow and the Moscow region. Some objects were guarded, and it was so absurd that the guards actually guarded a heap of rubbish.

While in these landfills, I saw that the liquid produced by the rotting waste flows out of the pipes sticking out on the slopes into the nearby rivers. Working on this project I wanted to show the rubbish not in the way everyone is used to see it. What is seen in front of our eyes is hilly landscapes, hiding million tons of consumer waste — a typical view of the contemporary system. We do not always see what is hidden.

Nikita Zhirkov

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40 facts about elektrostal.

Written by Lanette Mayes

Modified & Updated: 02 Mar 2024

Reviewed by Jessica Corbett

Elektrostal is a vibrant city located in the Moscow Oblast region of Russia. With a rich history, stunning architecture, and a thriving community, Elektrostal is a city that has much to offer. Whether you are a history buff, nature enthusiast, or simply curious about different cultures, Elektrostal is sure to captivate you.

This article will provide you with 40 fascinating facts about Elektrostal, giving you a better understanding of why this city is worth exploring. From its origins as an industrial hub to its modern-day charm, we will delve into the various aspects that make Elektrostal a unique and must-visit destination.

So, join us as we uncover the hidden treasures of Elektrostal and discover what makes this city a true gem in the heart of Russia.

Key Takeaways:

• Elektrostal, known as the “Motor City of Russia,” is a vibrant and growing city with a rich industrial history, offering diverse cultural experiences and a strong commitment to environmental sustainability.
• With its convenient location near Moscow, Elektrostal provides a picturesque landscape, vibrant nightlife, and a range of recreational activities, making it an ideal destination for residents and visitors alike.

Known as the “Motor City of Russia.”

Elektrostal, a city located in the Moscow Oblast region of Russia, earned the nickname “Motor City” due to its significant involvement in the automotive industry.

Home to the Elektrostal Metallurgical Plant.

Elektrostal is renowned for its metallurgical plant, which has been producing high-quality steel and alloys since its establishment in 1916.

Boasts a rich industrial heritage.

Elektrostal has a long history of industrial development, contributing to the growth and progress of the region.

Founded in 1916.

The city of Elektrostal was founded in 1916 as a result of the construction of the Elektrostal Metallurgical Plant.

Located approximately 50 kilometers east of Moscow.

Elektrostal is situated in close proximity to the Russian capital, making it easily accessible for both residents and visitors.

Known for its vibrant cultural scene.

Elektrostal is home to several cultural institutions, including museums, theaters, and art galleries that showcase the city’s rich artistic heritage.

A popular destination for nature lovers.

Surrounded by picturesque landscapes and forests, Elektrostal offers ample opportunities for outdoor activities such as hiking, camping, and birdwatching.

Hosts the annual Elektrostal City Day celebrations.

Every year, Elektrostal organizes festive events and activities to celebrate its founding, bringing together residents and visitors in a spirit of unity and joy.

Has a population of approximately 160,000 people.

Elektrostal is home to a diverse and vibrant community of around 160,000 residents, contributing to its dynamic atmosphere.

Boasts excellent education facilities.

The city is known for its well-established educational institutions, providing quality education to students of all ages.

A center for scientific research and innovation.

Elektrostal serves as an important hub for scientific research, particularly in the fields of metallurgy, materials science, and engineering.

Surrounded by picturesque lakes.

The city is blessed with numerous beautiful lakes, offering scenic views and recreational opportunities for locals and visitors alike.

Well-connected transportation system.

Elektrostal benefits from an efficient transportation network, including highways, railways, and public transportation options, ensuring convenient travel within and beyond the city.

Famous for its traditional Russian cuisine.

Food enthusiasts can indulge in authentic Russian dishes at numerous restaurants and cafes scattered throughout Elektrostal.

Home to notable architectural landmarks.

Elektrostal boasts impressive architecture, including the Church of the Transfiguration of the Lord and the Elektrostal Palace of Culture.

Offers a wide range of recreational facilities.

Residents and visitors can enjoy various recreational activities, such as sports complexes, swimming pools, and fitness centers, enhancing the overall quality of life.

Provides a high standard of healthcare.

Elektrostal is equipped with modern medical facilities, ensuring residents have access to quality healthcare services.

Home to the Elektrostal History Museum.

The Elektrostal History Museum showcases the city’s fascinating past through exhibitions and displays.

A hub for sports enthusiasts.

Elektrostal is passionate about sports, with numerous stadiums, arenas, and sports clubs offering opportunities for athletes and spectators.

Celebrates diverse cultural festivals.

Throughout the year, Elektrostal hosts a variety of cultural festivals, celebrating different ethnicities, traditions, and art forms.

Electric power played a significant role in its early development.

Elektrostal owes its name and initial growth to the establishment of electric power stations and the utilization of electricity in the industrial sector.

Boasts a thriving economy.

The city’s strong industrial base, coupled with its strategic location near Moscow, has contributed to Elektrostal’s prosperous economic status.

Houses the Elektrostal Drama Theater.

The Elektrostal Drama Theater is a cultural centerpiece, attracting theater enthusiasts from far and wide.

Popular destination for winter sports.

Elektrostal’s proximity to ski resorts and winter sport facilities makes it a favorite destination for skiing, snowboarding, and other winter activities.

Promotes environmental sustainability.

Elektrostal prioritizes environmental protection and sustainability, implementing initiatives to reduce pollution and preserve natural resources.

Home to renowned educational institutions.

Elektrostal is known for its prestigious schools and universities, offering a wide range of academic programs to students.

Committed to cultural preservation.

The city values its cultural heritage and takes active steps to preserve and promote traditional customs, crafts, and arts.

Hosts an annual International Film Festival.

The Elektrostal International Film Festival attracts filmmakers and cinema enthusiasts from around the world, showcasing a diverse range of films.

Encourages entrepreneurship and innovation.

Elektrostal supports aspiring entrepreneurs and fosters a culture of innovation, providing opportunities for startups and business development.

Offers a range of housing options.

Elektrostal provides diverse housing options, including apartments, houses, and residential complexes, catering to different lifestyles and budgets.

Home to notable sports teams.

Elektrostal is proud of its sports legacy, with several successful sports teams competing at regional and national levels.

Boasts a vibrant nightlife scene.

Residents and visitors can enjoy a lively nightlife in Elektrostal, with numerous bars, clubs, and entertainment venues.

Promotes cultural exchange and international relations.

Elektrostal actively engages in international partnerships, cultural exchanges, and diplomatic collaborations to foster global connections.

Surrounded by beautiful nature reserves.

Nearby nature reserves, such as the Barybino Forest and Luchinskoye Lake, offer opportunities for nature enthusiasts to explore and appreciate the region’s biodiversity.

Commemorates historical events.

The city pays tribute to significant historical events through memorials, monuments, and exhibitions, ensuring the preservation of collective memory.

Promotes sports and youth development.

Elektrostal invests in sports infrastructure and programs to encourage youth participation, health, and physical fitness.

Hosts annual cultural and artistic festivals.

Throughout the year, Elektrostal celebrates its cultural diversity through festivals dedicated to music, dance, art, and theater.

Provides a picturesque landscape for photography enthusiasts.

The city’s scenic beauty, architectural landmarks, and natural surroundings make it a paradise for photographers.

Connects to Moscow via a direct train line.

The convenient train connection between Elektrostal and Moscow makes commuting between the two cities effortless.

A city with a bright future.

Elektrostal continues to grow and develop, aiming to become a model city in terms of infrastructure, sustainability, and quality of life for its residents.

In conclusion, Elektrostal is a fascinating city with a rich history and a vibrant present. From its origins as a center of steel production to its modern-day status as a hub for education and industry, Elektrostal has plenty to offer both residents and visitors. With its beautiful parks, cultural attractions, and proximity to Moscow, there is no shortage of things to see and do in this dynamic city. Whether you’re interested in exploring its historical landmarks, enjoying outdoor activities, or immersing yourself in the local culture, Elektrostal has something for everyone. So, next time you find yourself in the Moscow region, don’t miss the opportunity to discover the hidden gems of Elektrostal.

Q: What is the population of Elektrostal?

A: As of the latest data, the population of Elektrostal is approximately XXXX.

Q: How far is Elektrostal from Moscow?

A: Elektrostal is located approximately XX kilometers away from Moscow.

Q: Are there any famous landmarks in Elektrostal?

A: Yes, Elektrostal is home to several notable landmarks, including XXXX and XXXX.

Q: What industries are prominent in Elektrostal?

A: Elektrostal is known for its steel production industry and is also a center for engineering and manufacturing.

Q: Are there any universities or educational institutions in Elektrostal?

A: Yes, Elektrostal is home to XXXX University and several other educational institutions.

Q: What are some popular outdoor activities in Elektrostal?

A: Elektrostal offers several outdoor activities, such as hiking, cycling, and picnicking in its beautiful parks.

Q: Is Elektrostal well-connected in terms of transportation?

A: Yes, Elektrostal has good transportation links, including trains and buses, making it easily accessible from nearby cities.

Q: Are there any annual events or festivals in Elektrostal?

A: Yes, Elektrostal hosts various events and festivals throughout the year, including XXXX and XXXX.

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