Steps towards cashless societies around the world seem to have taken significant steps forward in the last couple of years, with acceptance of non-cash payments becoming more widespread and technologies such as contactless aiming to make transactions more streamlined.
But while offering a choice of payments is certainly a good thing, there are growing concerns that this choice is being taken away from consumers as some countries push towards cashless. In Sweden, for example, a growing number of shops and restaurants no longer accept cash, and while the country has long been held up as a leader in the drive to cashless, there is increasing pushback from those citizens for whom physical cash is still an important part of their lives.
These worries may not be entirely without foundation. There are a number of challenges associated with a cashless society, and until they can be overcome, a 100 percent cash-free economy will still be a long way off. Here are five key issues to consider.
1. Security and privacy concerns
An increasing worry for many is the security of cashless solutions. In today’s environment, with both organized criminal gangs and nation-states always coming up with new ways of attacking digital systems, non-cash solutions may well be more exposed. At the same time, there are also privacy concerns that come with every transaction having a digital footprint, whereas cash is more anonymous.
Another issue if a country does not offer a cash payment option is what to do should the supporting systems be unavailable. While the latest infrastructure solutions will offer very high levels of availability, 100 percent uptime is never a guarantee. If this connectivity should fail, having cash as a reliable backup option will be essential, especially if natural disasters such as flooding, earthquakes or hurricanes knock out critical infrastructure
3. Tracking spending
Cash also has a key advantage over alternatives when it comes to issues such as budgeting and monitoring spending. When notes physically leave your hand as part of a transaction, this tends to register much more than when paying by card or other means. In fact, when using digital payments, it can be very easy to lose track of how much you are spending and could leave people approaching the end of the month with a much lower balance than they think, simply because they cannot see in front of them how much money they have available.
4. Unwilling consumers
Regardless of how effective public education campaigns may be, there will always be a certain number of consumers who are resistant to the change, often with very good reasons. These are often thought of as more elderly citizens who are not as tech-savvy as their younger peers. But while there may be some truth in this, people of all ages still prefer to deal in cash for a variety of reasons, and their wishes must be respected.
5. Loss of control
Many of the concerns about moving away from cash essentially come down to consumers feeling as though they are in less control of their finances. Whether it’s being able to physically feel notes and coins in their wallet or purse, or worries about putting their faith in the systems of private companies or governments, cash gives people a sense of comfort and security that can’t be matched by other alternatives. This means that, while non-cash payments may become the norm for many transactions in the coming years, there must always be a place for notes and coins.
Ultimately, cash remains trusted, secure, reliable and has a tangible sense of worth, which is particularly handy when budgeting. Card use and mobile payments definitely provide flexibility and choice for consumers but a full cashless society remains unlikely. What may transpire is a very interesting world of ATM and mobile convergence and a focus on an omni-channel experience where consumers have a choice of transactions and cashless and cash happily coexist together.