Is a Cash-Less Society Imminent? No So Fast…

It seems like every so often, there’s discussion about why change is still used as currency. Change – as in pennies, nickels, dimes and quarters. With very few items costing less than a dollar these days (not to mention more and more people turning to credit cards and digital payments), change has become somewhat obsolete from a currency standpoint. What’s more is that traditional platforms that once exclusively took only quarters or change (i.e., parking meters), now accept credit and debit as a form of payment. Yet, we still receive change on cash transactions.

Lately, the discussion about currency has gone a step further than change. Yes, some are even going as far to suggest that change and cash be replaced exclusively by digital forms of currency. In addition to credit and debit cards, this would include things like Apple Pay, among others. The concept of a cash-less society is made possible by the leaps in technology over the past several years to move closer to reality.

But how imminent is a cash-less society? Let’s examine:

The Implications of a Cash-Less Society

The drive toward a cash-less society has largely come from overseas. In fact, according to some reports, cash transactions are becoming increasingly rare across the pond. In Sweden, for example, about 20 percent of all Swedes say they never withdraw cash from the ATM. In all of Europe, only about one out of every five transactions is made in cash. Digital currency is starting to become more of the norm, and big tech companies are betting on it. From a convenience standpoint, it makes sense. However, it’s obvious that any transition such as this would have to be gradually made so as not to leave late adopters behind.

Additionally, as it would stand now, a cash-less society could spell trouble for certain types of people. The following groups would face disadvantages we can’t ignore:

  • Those without adequate Internet access: In a cash-less society, the Internet will become all the more important when it comes to attaining balances and making transfers. In rural areas – or in areas or residences without reliable Internet coverage – this may present difficulties.
  • Extreme budgeters: Some people rely on cash withdrawals so they know they’re only spending what they can afford rather than charge beyond their limits.
  • The physically or mentally disabled: Finally, not everyone can pick up on things as quickly as others – and this could pose even more difficulties for those with physical or mental disabilities who may have a difficult time grasping this.
  • Finally, a cash-less, all-digital society could spell doom and gloom should a mass cyber attack or widespread IT outage occur.

    What Might a Cash-Less Society Look Like?

    In many ways, the shift is already on when it comes to the development of a cash-less society. Take, for instance, the fact that many credit card companies are slated to require their users to have some sort of biometric data on file beginning in 2019. These biometrics might include verifying user identity with fingerprint scanning or facial recognition technology as a means of safeguarding consumers from identity theft.

    There are a few other practices already in place around the world that may provide clues to how a cash-less society would work. For example, in Sweden, several thousand people have had small chips embedded into their skin, a minor procedure that instantly and seamlessly permits them to make payments on public transportation, such as trains. In China, consumers can actually make payments via text message. Even in the U.S., more employers are turning to services like PayPal to send funds, a sign that the money transfer service is becoming more than just a peer-to-peer one.

    The bottom line is that a cash-less society isn’t imminent, but people are moving away from using cash for transactions for a variety of reasons. Even in Europe, the use of cash as a payment could fall to represent just 10 percent of all transactions over the next 15 years. It’s likely that many other countries are following a similar pattern.


    Ethan Warrick
    Wealth Authority

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