With growing technological advancements, moving toward a cashless society seems more possible now more than ever. The use of debit cards and electronic services like Venmo and Apple Pay allows people to access their money easily. Not having to carry around physical dollar bills and change is a major appeal, but the cons associated with a shift toward a completely cashless society show how unfeasible this idea really is if actually implemented.
Firstly, the pros of a cashless society should be acknowledged. Not carrying around physical cash makes one less of a target for criminals. A study found that in Missouri, the crime rate fell by nearly 10 percent when Electronic Benefit Transfer cards were used to replace cash welfare benefits. Related to crime, going cashless is likely to decrease illegal transactions that typically rely on cash, which cannot be traced. An electronic system, on the other hand, would be able to trace sources and keep a record of where and when money is transferred. This would also mean that the government would be able to trace, oversee and tax every single dollar spent. The financial costs of producing and securing physical cash are other factors that contribute to the rising appeal of a cashless society. These costs include physically printing and minting bills and coins, as well as securing the cash in banks, stores and throughout the transport processes. Ditching cash for electronic methods also makes it easier to make payments. Whether it’s splitting the check with friends for dinner or making a quick payment to someone across the world, electronic payments make the process easier by avoiding the typical obstacles associated with physically transferring cash to others. Relating to the physical transfer of cash, and given the state of the world for the past two years, concern over the spread of germs through cash transfers is now another factor that worries some. While studies have shown that it is unlikely for COVID-19 to transfer through cash and coins, the overall public concern of bacteria and viruses spreading still contributes to some support of a cashless system.
While these pros improve the future of money in terms of transfer efficiency, crime, financial costs and public health, completely abandoning cash threatens privacy and security. It can be difficult to decide which organizations you can trust to handle your money electronically. While many companies like Apple and Venmo have built their reputations and are generally trusted by the public, wrongly trusting a less established company can result in hard-earned money landing in the wrong hands and being lost or stolen. Shifting all of your finances digitally also means that information can potentially be exposed to others through the internet. While physical cash robberies may decrease, digital targeting by hackers becomes a bigger threat. The total reliance on technology is another con of a cashless society. App glitches, a dead phone battery or electronic system malfunction can completely inhibit the transfer of money for unpredictable periods of time. In these cases, cash is a necessary backup that can be used since situations like these are bound to occur.
Switching to a cashless society also poses an additional obstacle for those that are already economically disadvantaged. Creating a bank account and obtaining a credit card itself requires supplemental documents like a government-issued ID. Using systems like Apple Pay or Venmo requires a smartphone, which may not be financially possible to obtain for some. Furthermore, without cash, it is more difficult to give money to homeless people, unless they have the necessary technology, which will require you to go through extra steps of exchanging the necessary information to complete the transfer — steps that many may be unwilling to go through. The necessity for technology in a cashless society also poses an obstacle for those less familiar with technology like smartphones. For older generations or those not familiar with electronic cash payment systems, learning new processes of transferring money may not come as easily, especially when coupled with trying to use unfamiliar technology like smartphones. Before even addressing the challenge of helping different groups obtain and use cashless tools and methods, convincing people who do not typically use technology like computers or smartphones to make the switch in the first place would be the greatest hurdle to overcome. Ultimately, the inability to purchase necessary goods solely due to the form of currency is an unavoidable obstacle.
Sweden is one example of a country shifting rapidly to a cashless society. According to NPR, a 2018 study found that “only 13 percent of Swedes reported using cash for a recent purchase, according to a nationwide survey, down from around 40 percent in 2010.” Buses, trains and a number of stores in Sweden have switched to accepting cashless payments only. Yet, despite their technological advancements and overall fewer security concerns among the public, the cons of a cashless society — especially for vulnerable populations — still exist. The drawbacks are of such concern that the Swedish government still advises citizens to keep backup cash in the case of technology failures or cyber attacks. Even for one of the most technologically advanced nations, a complete shift to a cashless society is not realistic.
As long as the importance of cash, whether it be for everyday purchases or times of emergency, is recognized by a majority of people, it won’t be possible to shift to a cashless society anytime in the near future. Embracing technological advancements in order to expand payment options beyond cash has its pros and having the flexibility to use different payment methods should be welcomed, yet the cons associated with abandoning cash, namely the impact on vulnerable groups, cannot be ignored. When it comes to a variable as integral as money, jeopardizing cash flow and vulnerable groups is not worth the risk for a completely cashless society.
Sana Malik is a senior double-majoring in biology and philosophy, politics and law.