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Do We Really Want to Live in a Cashless Society?

Do We Really Want to Live in a Cashless Society?
Igor Stevanovic | Dreamstime.com

By    |   Friday, 23 February 2018 03:58 PM

Imagine that you never have to go to the ATM again. Each time that you want to make a purchase, you simply press a button on your mobile phone, or flash your credit card and your transaction is complete.

Chances are you don’t have to use your imagination too much, as it’s already becoming a reality.

Various countries around the world, from the United Kingdom to India, are already transitioning into what’s known as a “cashless societies”. There are various schools of thought on whether or not getting rid of cash will be a positive thing. With some supporters voicing the importance of convenience, while those who are warier are concerned with what demonetization will mean in regards to privacy.

Whether we like it or not, steps towards eradicating cash are already being taken, which is why it’s important for us to ask ourselves: do we really want to live in a cashless society?

Digital banking could help us learn more about consumer needs

Although there are vastly differing opinions on how much of our personal information should be stored, with technology becoming an integral part of our lives, it’s becoming increasingly difficult to avoid. Mobile payment systems are becoming the norm for today’s consumers, and in the United States alone, a whopping 51% percent of purchases are made online, with that number growing every year.

By tracking online transactions, it’s now easier than ever for businesses to personalize their content based on consumer-data analysis. Yet, as long as cash-based transactions are being made, there is still a large portion of the population that remains misunderstood. An increase in demonetization could lead to a boom in increasingly precise financial data sets that will grant data analysts more detailed information regarding consumer activity. If used responsibly, data gathered through mobile payment systems would help businesses continue to improve their product services to meet contemporary consumer needs.

Security and privacy is a growing concern

While mobile payment systems are incredibly convenient, they also have the ability to store information that could be used to improve these financial services in the future. While it’s largely understood that we are living in a data-driven world, that doesn’t necessarily mean we would like major financial institutions and corporations knowing about every single purchase we make.

In addition to not wanting everything out in the open, consumers have also expressed concerns regarding security issues, out of fear that sensitive personal information could be hacked or even stolen. As the world becomes more connected, the chances of cyber-crime go up. In the case that digital accounts become compromised, it is wise that we have an alternative method of payment, such as cash, directly on hand.

Cashless societies could have a negative impact on certain communities

Even supporters of a cashless society recognize potential setbacks of eliminating an individual’s payment choices. One of the major arguments against implementing cashless societies is that a decrease in cash will eventually lead to a decrease in economic equality, which is already a major contemporary issue. For individuals that aren’t financially well-off, have debts and little to no access to a personal banking system, their ability to be financially setup could be seriously compromised.

As of last year, it was calculated that around 39% of the world’s entire population is currently without a bank account. While the number of digital transactions is increasing every year, making the shift to a completely cashless society would mean making bank account more accessible to populations in developing countries.

While we are still a long way from living in a cashless world, we can already catch a glimpse of the future to come. Luckily we still have plenty of time to figure out the kinks or decide if living in a cashless society is the best option in the first place.

Michael Volkmann is an entrepreneur with a focus on business operations and finance. He has worked with many small businesses helping them with their M&A for over 6 years. You may sometimes catch him on Twitter.

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Imagine that you never have to go to the ATM again. Each time that you want to make a purchase, you simply press a button on your mobile phone, or flash your credit card and your transaction is complete.
cashless, society, money, credit
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2018-58-23
Friday, 23 February 2018 03:58 PM
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