While thereare many countries who are in favour of the move to this cashless trend asevery day we inch closer, there are still some who are sceptical of thebenefits and feel that there are compelling negatives which outweigh thepositives. Many sectors and firms are still highly dependent on cash eventhough as other transition away which will be problematic, as cash could stillhave a long life ahead. For many, cash holds a sentimental value as it embodiessolidarity, security and reassurance. Some in society still stash large cashquantities, in anticipation of that ‘rainy day’.
Going towards a cashlesssociety can be misused, creating suspicion and undesirable consequences.Technological changes that revolutionize the status quo is something that will constantlybe encountered with resistance and beliefs that more harm than benefits arisefrom it. The pushtowards a cashless society is fuelled by its efficiency and convenience.
Moneyhas become conceptual opposed to physical and firms are reliant on consumers’mindless attitude to spending, society is lulled thinking their money isn’tgoing to be relinquished. With the simplicity and effortlessness of taping yourcard against a reader or remembering your pin number combined with websitesincreasingly accepting low value purchases on bank cards and subscription basedfirms adopting a ‘laissez-faire’ method with financial management. Goingcashless encourages frivolous spending habits as card or mobile transactionscould expose an unsuspecting and unwary population to a spending trap. Usingcashless payments for transactions poses as a natural bulwark for consumers whocannot discipline their spending behaviour which could be a reason for thetemptations to overspend with money they don’t have, landing them intofinancial difficulties and throwing their finances into disarray. A highpenetration of the digital payment system is contingent on that the same cash quantitiesdoes not come back into circulation. If it does, people are more likely toswitch back to the former ease of using cash as it is a habit that they mayfind difficult to break. In addition,from the practical barriers of going cashless, the biggest block is thepsychological shift.
Looking from a consumers’ standpoint, we are advancingthree generations through a digital medium. There’s challenges for financialinstitutions, banks and technology innovators to find a communal financeecosystem to prevent dividing society and keep us all interconnected. Thedigital medium may exclude the older generation as challenges may be presentedto tech-unfriendly people who may need more time to familiarise and adapt tothe evolution in financial payments and transactions. There has been a smallresistance in society which has impeded the expansion of debit cards and couldfurther decelerate the progression in digital and electronic payments. Manyconsumers have a partial problem with the name ‘debit cards’ and to combat this,cards are now often stated as cash cards. Another consumer issue is that thereisn’t a net advantage to using card payments as carrying a cash or cheque bookshave elements of convenience.
The greatest flaw in a cashless economy is thatit could create a new socioeconomic class, as location could play a key role ifwe were to go cashless. Many economists fear a two-tier society with those onthe lower end of the income spectrum becoming disconnected in a cashlesssociety due their reliance on conventional physical currency. Cash should besimple between everyone in society and if society is pressured withcashlessness it increases the requirements to be tied to financial systems asthe poor are most likely to be on the peripherals. Conventional financialsystems in developing countries struggle leaving many people on financialfringes as 2.5 billion do not have access to banking services. (Lin 2017) Privacy andsecurity are pressing issues if society were to go cashless as using Fintechand digital payments as both consumers and producers are vulnerable tocyber-crimes such as fraud and identity loss through cyber-attacks launched byhackers and criminals.
Society is a risk of our financial information beingexploited as in 2017, Forever 21 confirmed that a breach left customer paymentcard information exposed to hackers. Hackers collected credit card numbers,expiration dates, verification codes and cardholder names. (Hardekopf 2018).Consumer and cynics believe that the government could use the financial datafor their own political agendas as governments or banks are common custodiansof cash where it has the potential to be misused. The fear of being trackedisn’t groundless as there aren’t any technological restrictions to the issuerencoding data on the buyer and tracking the use of the card, money andfinancial asset can be withheld and frozen from people if they become an ‘enemyof the state’.
Also with card payment and fintech firms providing serviceswhere banks can analyse their customers expenditure patterns then they cantarget sales and promote products towards specific customers, thus can lead toexploitation of vulnerable consumers.