Cashless societies and paying by card is a modern-day gold rush for fintech companies. It is interesting how fintech companies address the issue of contactless payment in a pandemic. Cash is perceived to be a health risk and makes it less popular than ever to carry. This payment system is a boom for the vast number of worldwide company start-ups including: Stripe, Tax Back, Fexco, Paymentsense,
Assure Hedge, Big Red Cloud, Cerebreon, Circit.io, CorribPoint, CurrencyFair, Gecko Governance, ID-Pal, TransferMate, Trezeo, Umba and so many others.
However the national currency is always legal tender but with the fall in physical cash, the fact is that retailers don’t have to offer it and technology has moved so fast that it’s perfectly possible to live in most cities without ever using cash.
Cashless societies make cashless more prevalent
Many of us are aware that cash is becoming less prevalent. This is backed by evidence. Bloomberg said recently that 90% of all transaction are cashless in Europe. In Sweden the figures stand at about 98.7% . This means Sweden has taken cashlessness to the next level, as the Covid 19 pandemic and prior worldwide trends have almost pushed notes and coins to extinction .
For instance in cashless societies coffee shops and take-outs are everywhere in cities, but how does a homeless person or an undocumented person, an elderly person or teenager pay when they do not have access to a debit card?
It is pretty annoying in our cashless societies that make it difficult for poor people living on the streets to even get a cup of coffee as they seem less inclusive by not having a card the way potential customers are receiving a not-so-subtle message from certain businesses about who are the “desired clientele”. Even government and local councils are increasingly providing services to those that have debit or credit cards that can conveniently pay parking tickets online or other fines. If you’re unbanked, you’re required to make the trip to pay for your ticket in person, taking away valuable time people could use supporting themselves or their family.
Belonging in terms of cashless-ness is discriminatory
There are already so many forms of stigma and discrimination within society, and now, we’re adding the mode of payment to the list — if we start marking belonging by ‘means of payment,’ that will be a big problem and does not provide for societal inclusiveness. It doesn’t seem fair that I can’t get a sandwich or a coffee because I am not carrying plastic. The strange thing is that it’s completely legal for business owners to reject cash but in doing so they’re making a statement that really should not be encouraged.
In cashless societies, the legislation will need to be written to stop businesses from refusing to accept cash. This would provide protection against unlawful discrimination. It will be too fragile a system if there is nothing we can go back to in case of disruption.
There are some solutions, for example, a counter attendant might take the cash when offered and swipe with a personal/company card, or allow the item to be provided if the customer had waited patiently in line to discover at the counter that they didnt have a card on them. Better to err on good customer service and request payment the next time they are in. Generally people are trust worthy and will return to pay.
On the other hand advantages for cashlessness include some of the following:
For the state, it is beneficial that taxes can be collected more easily as transactions are transparent. 2) Money laundering can be reduced.
3) Another advantage of going cashless is cash is physical and so can be lost or damaged . Also for inflationary reasons cash needs to be reprinted and replenished which is costly. 4) Storing money has costs, namely vaults maintenance, transportation, administration electricity etc.
Disadvantages of cashless-ness
- It physically means that it is a safeguard against internet, electricity or phone outage and even having a faulty card or forgotten pin.
- Include total inconvenience for certain sectors of society who are excluded
- Foreign tourists are also affected as they incur exchange rates that are exorbitant.
Regarding the last bastions of cash – kids’ pocket money. In Sweden that even seems to have disappeared where only 16% of Swedish children get regular allowances in the form of actual bank notes and coins according to a poll taken by Sifo. Most swedish parents now add money to their children’s account by bank transfer.
There is some light in relation to Prepaid
It seems that card payments have not completely taken over though and it does seem that cash ( with the aid of the correct legislation ) will still be active into the future. Until then I am sure systems will advance in the prepaid debits card arena. One Zero Medium refers to services like Bluebird by American Express,Net Spend and others that allow for anyone to achieve the benefits of a traditional debit card without the need for a permanent address or a national security number. There are almost 16 million people in America that do not have or use bank accounts regularly and evidence suggest that 26.7 percent of the unbanked population is already using prepaid debit cards of some kind.
It seems that cashlessness taking over is inevitable, but at least in the short term there have been steps taken that allow those that are disenfranchised to still use cash.