Most people agree that convenience is one of the greatest benefits of moving towards a cashless society. Increasingly, those benefits are being enjoyed by an ever-growing number of people, no matter what their personal economic situation. According to one journal article, the benefits of a cashless society go far beyond mere convenience.
The effect on the economy of going cashless can prove to be substantial. When people are able to buy all of the smaller, less expensive items that up until now they’ve had to forego because they didn’t have enough cash or convenient access to an ATM machine, those purchases are likely to be reflected in a prolonged surge of economic growth.
Further, the cost of printing money is substantial. According to the Federal Reserve Board, it costs 4.9 cents to print each one dollar bill. For five dollar notes, the cost rises to 10.9 cents per note, and for one hundred dollar notes, 12.3 cents. The 2015 budget for these costs was a staggering $717.9 million. In moving towards a cashless society, those millions could be better and more effectively spent on education and other beneficial social programs.
In addition to stimulating the economy and more effectively utilizing financial resources, the POS technology making a cashless society possible is also helping to level the financial playing field for small and medium sized businesses. Retail giants such as Walmart have long been able to take advantage of this technology to expand and perfect their online operations. For the first time, POS technology has made it possible for small business to effectively compete by offering the same level of convenience.
Moving towards a cashless society could also potentially reduce national health care costs. One of the first lessons children are taught upon earning their first cash allowances is to wash their hands thoroughly after handling money. While it is not possible to accurately determine just how much illness has been caused by money changing hands multiple times, cash does increase the possibility of a contagious illness becoming a national epidemic.
Hong Kong was one of the first international cities to experiment with making many everyday transactions, such as travel, completely cashless through the use of the Octopus card, a contactless smart card which utilizes a high-frequency radio identification transponder. Reportedly, 99% of residents possess the card, which is accepted by 14,000 retail outlets which process $1.8 million dollars in transactions each day.
Sweden is also moving towards a cashless society using a mobile payment system called Swish. The system has proven so popular that only 40 to 60 percent of the approximately 80 billion Swedish crowns available is still in regular circulation. Six years ago, the amount available for circulation was approximately 106 billion crowns. Four out of every five purchases are made electronically, and many major banks no longer accept cash at all.
Despite its benefits, there are still a number of concerns associated with a cashless society. While it can reduce some kinds of crime, such as money-laundering and other illegal activities, one concern is that it may result in a rise in cybercrime. In countries like the U.S., political activists have also expressed concerns about the effect of a cashless society on personal privacy.
However, despite concerns, the fact remains that according to a recent report by the Federal Reserve 61% of the 89% of Americans with cell phones have smart phones. 39% of cell phone owners and 51% of smart phone owners used mobile banking in 2014. Those mobile banking transactions have included checking balances, depositing checks, and making payments. Cash may one day become like art–a collector’s item.