You’ve probably heard the expression “cash is king,” but how much longer will it reign? More stores than ever take only card payment, and cryptocurrency gives us even more cashless ways to spend.
Not every country is shifting away from cash at the same rate, but it’s clearly happening. It’s a bit of a futuristic concept, but we might be drifting toward living in a totally cashless society. The move won’t happen overnight, but in many ways, we’ve already taken the first steps.
Shifts Towards Cashlessness
A few countries are ahead of the curve when it comes to eliminating cash. In Sweden, for instance, only 15 percent of transactions were made with cash in 2017. The Swedish bank that carried out the study on cashlessness determined “In the not-too-distant future, Sweden may become a society in which cash is no longer generally accepted.”
America is gradually moving in this direction too. A study from Square analyzed transactions from 2015 to 2019 to see how many Americans make purchases with cash vs. credit cards. Notably, they found that in 2015, 59 percent of purchases of $5 or less were made with cash, but that number fell to 51 percent by 2019.
While the U.S. may not be a cashless society for years, we’re already in a less-cash society compared to the past.
The Pros and Cons of a Cashless Society
A cashless society would theoretically be better in a few ways. First, many types of crime would shrink. While many people associate things like cryptocurrency with crime, cash transactions tend to make criminal activity easier. Cash payments leave no paper trail or documentation, unlike online or card payments.
Plus, cash can be stolen and used more easily than cards or crypto, which also means businesses need to take expensive measures to protect themselves from theft. Managing cash costs money, something that would be a thing of the past in a cashless society.
Of course, there are potential drawbacks as well. Primarily many people are concerned about privacy. While electronic transactions reduce crime by tracking and storing information, the flip side of this coin is that we sacrifice some of our privacy. Companies may use your data in ways that you’re not comfortable with without telling you. Even if you trust the company, they may be vulnerable to a data breach that exposes your information in ways that were previously unimaginable.
As with any technology, online banks and transactions can suffer glitches or outages. Cash works whether or not you have an internet connection, but a cashless society would struggle if there were any technological issues.
A change toward a cashless society would be a massive one, so naturally, there are good arguments for and against it. Weighing the pros and cons will determine where our future goes.
What to Expect in the Future
The emergence of online banking and cryptocurrency has started us on the path toward becoming a cashless society, but this may be just the beginning. We’re talking about a pretty radical shift in society so predicting specifics is difficult. But we have seen a few signs of what the future may hold.
Apple Pay, for example, shows that even credit and debit cards could be used less and less although they did come out with the Apple Card. Smartphones could become the primary medium for transactions, leaving plastic in the past with paper.
Online banks may continue to grow and eventually overcome brick and mortar institutions. Many of the remaining functions of traditional banks wouldn’t be necessary in a cashless society, so the convenience of an online bank like Varo could become the new norm.
Cryptocurrency probably has a role to play as well. Bitcoin has come a long way from a niche investment to an accepted payment method, and it’s really the beginning of cryptos. Some crypto enthusiasts think digital currency will eventually supplant all others. It doesn’t seem likely now, but it’s clear that the technology will be a big part of the future.