A cashless society is defined as a society in which the purchase of goods and services is made by credit card or electronic funds transferal rather than with cash or checks. There are many who believe that we are currently in the beginning stages of a transition to such a society, as Americans rely increasingly on stored value cards for their daily transactions. While there are a number of benefits to living in a cashless society, here are four major things to consider:
- Increased Security of Funds
There is no denying that holding cash creates a security risk. From bank robberies to purse snatchings to check fraud, cash places a target on the backs of all who carry it. Stored value cards can quickly be canceled if stolen, and cutting edge encryption techniques make it increasingly difficult for hackers to gain access to accounts via cyber-attacks. While there is still some risk associated with cashless transactions, the potential for robbery is significantly decreased on a day-to-day basis when no one uses cash.
- Decreased Illegal Cash-Based Activity
Criminals who participate in illegal, cash-based enterprises will have a much harder time conducting their businesses when their customers cannot rely on cash to conduct these transactions. Furthermore, living in a cash-free society essentially destroys the practice of money laundering, a practice which seriously undermines the success and progress of the legitimate business sector.
- More Efficient Processing of Transactions
We have all experienced the agitation of being stuck in line at a store or vending machine, or on a bus behind someone who is attempting to pay in exact change or write a check. Paying for things using stored value cards makes transactions much faster and efficient.
- Increased Public Spending
Studies show that people are more likely to forego small purchases when paying in cash because they don’t have the cash on them or they don’t want to break large bills. Alternatively, when people use stored value cards, they are more likely to spend on small “afterthought” purchases, such as buying a pack of gum at a gas station. Such increased public spending could provide a boost to the economy.
If the millennials have shown us anything, it’s that the ability to have a cash-less society can exist. This age group, the “computer generation,” is far more advanced and comfortable with using stored value cards for even the smallest of purchases, and they rarely, if ever, carry cash.
In spite of evidence of the inevitability of this transition, there are many who fear that the phasing out of traditional currency and checks will have serious negative societal repercussions. While only time will reveal the absolute impact a cash-less world will have on our everyday lives, I predict that the benefits of living in a cash-free culture will far outweigh any disadvantages.