Cashless policy might sound odd to some ears, but with the look of things in the society, it’s already on its way.
Several powerful forces are behind cashless transactions, including the government and financial companies.
Though no country or society has gone totally cashless yet, some issues must be addressed before a cashless policy can be fully adopted.
The benefits and demerits below will let you know its effects and whether society will give up on a cashless system or cash entirely.
Benefits of Cashless Policy
i. Decrease in Crime Wave
A cashless society reduces crime rates. It makes it uneasy for people to rob because there is no tangible money to steal.
Carrying cash, especially large amounts, makes it easy for criminals to target you, and it may be difficult to get, track, or prove that it is your cash.
ii. Reduces Money Laundering & Paperwork
A cashless policy should be adopted because illegal transactions, drug operations, and gambling often use cash so that there won’t be any record of such transactions, hence, the money will be easy to launder.
iii. Cashless Policy Makes International Payments Become Easier
If you are traveling to a country that accepts cashless transactions, it becomes easy to exchange your money for local currency. All you need is your mobile device, and you’re good to go. Cashless Policy makes International payment easier and faster.
iv. Reduction of Paperwork and Cash Management
Being cashless is very convenient. Managing cash, such as printing bills, minting coins, and storing cash when they run out, costs money.
It costs money to print and store huge sums of cash. For instance, banks and large supermarkets/stores spend money hiring security personnel to protect against robberies.
Disadvantages of Cashless Policy
i. Cashless Policy May Create Privacy Problems
Digital transactions are less private compared to cash payments. The organization that keeps your data may handle your personal information carelessly online, and sometimes this info might be leaked to third parties.
As you do all transactions online, it is likely your data could get into malicious hands if there is no proper privacy policy and security.
ii. Glitches and Network Problems
Technology problems could cause more harm than good sometimes. Glitches, outages, or server downtimes can cause problems. With that, you may be unable to make transactions or may be debited twice. When systems malfunction during urgent situations, it’s equal to being strapped for cash.
iii. Cashless Policy Involves Additional Fees/Charges
Once cashless transactions are adopted, it is more likely these services might not be free. You may be charged for every single transaction you make online. Hence, the more you spend, the more you lose money.
iv. Overspending
The more you carry out transactions via electronic payments, the easier it is to be tempted to overspend more than your budget since transactions are completed with just a pin, swipe, tap, click, or thumbprint.
When you have cash on you, you feel the impact of taking money out of your pocket.
v. Hacking
Hackers are the robbers of the digital world. In a cashless society, you are exposed to hackers, and once you are targeted, you may lose all the money in your account without any alternative, and it will be difficult to restore you to your previous financial position.
Everything in life has advantages and disadvantages, some businesses may benefit from charges and processing fees when their apps are used to receive and send payments. Also, some businesses will be able to save money, and transactions will be easier to track.
Cashless policy seems to be more better and easier but users needs to be more security conscious and attentive details