With an increasing reliance on contactless payments and cryptocurrency adoption, the world appears to be moving towards a cashless future. Let’s find out if this state of affairs will benefit or cripple the global economy:
A Lower Rate of Crime
One of the main benefits of going cashless would be the reduced rate of crime. This includes everything from muggings on the street to terrorism and financial crime.
Once individuals stop carrying money on their person, physical crimes will reduce drastically. As for other types of crime, digital banking leaves a trail for every transaction and transfer. This means that banks and authorities know exactly where the money went, and can track it every step of the way. As you can imagine, fewer crimes mean that the economy can improve overall.
A Greater Risk to Personal Security
Many people are worried about what digital forms of payment mean for personal privacy. Every transaction or transfer is loaded with personal data that companies and individuals can use for their own purposes.
This impacts the economy by changing how consumers interact with brands. They may be more likely to stick to global companies because they feel more secure or may decide to stick with smaller brands as they feel their data is safer there.
Regardless of which move consumers make, this could potentially create a lopsided economy where the money goes in a few directions rather than several different ones.
It should be noted that there are already avenues which counteract these concerns. The credit card reader for Android is one of these measures. This reader scans the information and authenticates it, but does not store it on the system. Such options could help to even out the flow of money.
Fewer Resources Required
Most people don’t realize the true cost of cash to society. Physical money needs to be stored, safeguarded, and transported. Not to mention, individuals need to travel themselves to physically attain cash.
In a cashless society, however, none of this is required. Banks no longer require physical locations, meaning they can ease up on various fees with their clients, reducing the overall cost of banking.
The Working Class May Suffer
It should be noted that the working class would not adapt as well to a cashless society. These individuals are less likely to have access to digital banking alternatives. A considerable number of people may not even have a bank account.
In areas with poor internet connectivity, payments may not go through as easily, causing a disruption of various transactions. While this is a serious issue, steps can be taken to improve the situation for people of a lower economic status. This begins with banking and financial inclusivity. Once everyone has the same level of access, a cashless society may benefit the global economy.
Going cashless is not as straightforward as most people assume. While this move can help the global economy, it may also hinder it. As a result, this question needs to be considered in greater depth before any changes are made.