No Cash? No Problem: The Impact of a Cashless Society
Rolling coins, counting pennies, putting birthday money into our piggy banks — cash has always been an important part of our lives. Now, imagine a world where cash is no longer king. Like so many other things that we once thought were impossible, a society without cash is increasingly a reality.
Around the world, the use of cash has been steadily declining, and some experts predict that cash payments will fall by as much as thirty percent over the next ten years. Denmark, Sweden, and Thailand have passed laws that allow businesses to ban cash payments, and in some cases require payments by mobile applications or credit cards. Businesses in the United Kingdom are also jumping on board. Citing increased efficiency and speed during the lunch time rush, the salad chain Tossed recently introduced cashless restaurants in the UK. In Seattle, Amazon recently introduced its “Just Walk Out” shopping experience; customers simply use the Amazon Go app to enter the store, take the products they want, and go!
Banning cash saves employee time and payroll costs by eliminating cash registers and trips to the bank, there is no need for gas or guards for armored cars. Going cashless allows companies to streamline accounting and gives them the ability to track customer habits and increase retail sales.
Banning cash saves employee time and payroll costs by eliminating cash registers and trips to the bank, there is no need for gas or guards for armored cars. Going cashless allows companies to streamline accounting and gives them the ability to track customer habits and increase retail sales. The insurance industry will likely be affected by the movement towards mobile payments. A commercial crime policy typically provides coverage for funds transfer fraud, money and securities coverage. In developing countries, mobile payments throughout the micro insurance value chain can provide access to insurance for millions of people.
Don’t turn in all of your green just yet, however. Despite the increase in mobile applications, cash is still used to complete more than 80 percent of transactions worldwide. Security risks are still at the forefront of electronic transactions. Although the banks, credit card companies and inventors of mobile applications are working tirelessly to find ways to create mediums that consumers can trust and feel safe using, the risks still exist. In addition, many people still depend on cash – people who survive largely on cash tips (i.e. valets, doormen), smaller stores that cannot afford credit card company fees and individuals who cannot afford the latest smart phones or who have credit issues. It is also worth considering the dilemmas that we might face if networks are down and consumers can’t purchase groceries, gas or oil because cash options are not available.
While the cashless world is certainly on the horizon, many kinks still need to be ironed out. We do need to start preparing for this new age though. The convenience of paying by mobile applications, credit cards and Apple Pay® could eventually eliminate the need to carry cash. Will our grandchildren will be as excited to fill their virtual piggy banks with virtual currency as we were to fill ours with coins and paper?