Because of the coronavirus, paper money is no longer peoples favorite. A growing amount of people worldwide have stopped using banknotes in fear that these, passed on from thousands of people, could be a possible vector for the massively spreading coronavirus.
One possible way of preventing this is to accomplish all financial transactions in a non-physical form of banknotes and coins, the so-called cashless society.
But is cashless society secure and convenient, or does is also have fatal risks that could cause an immense problem?
True, a cashless society does have a various amount of advantages that are not existing in the world today. One of the most beneficial is that cashless payments eliminate different kinds of risks, including the fear of counterfeit money as well as robberies of cash. These risks do not exist in a world of digital currencies. According to an estimation of the FBI, there were more than 300,000 in the year 2017 in the US alone. Many of them were thieveries of money. It means that we can create a much more nonviolent society with a general use of cashless payment.
However, there are many more aspects on the negative side that are hard to prevent once we enter the cashless society. One widespread concern is the lack of privacy. All payments made in a digitized economy will be traceable. With verifiable transactions, companies and hackers would have potential access to these pieces of information, which makes the digital world much more vulnerable.
Another concern is about those that are unbanked. According to FDIC data, of households that earn an annual income of less than $15,000 per year, about 25% do not have a bank account. Nearly 8% of people in the United States do not have bank accounts. Over 20% in some cities and rural counties, and even over 40% in some census tracts. This makes a cashless society almost impossible for the world we live in today.
A similar concern is about the people who do not use modern technologies, most of them are people over 65. It could even be very inconvenient and complicated for them to buy something in a nearby store. Many of them don’t understand how to use a smartphone or computers, some of them don’t even have internet at home, which would be another problem that makes it impossible.
And these are not all. Another problem is the transaction tax. People would have to pay transaction taxes with every single payment, which would make prices higher and is not beneficial at all. A slightly unimportant concern is that people will be less aware of using huge amounts of money because they don’t see the money slipping away from their hands as they use it, which could cause overspending.
A cashless society seems to be possible, but if we examine it closer, it is not possible yet for us but this change would come someday in the future.