Would you prefer to live in a cashless society?
With around 52% of transactions in the UK now cashless payments, are we getting closer to a cashless society?
The use of bank notes can be traced back to 7th century China, where merchants used them to avoid carrying copper coins in large transactions.
Over in England, we didn’t jump on the bandwagon until 1694 when we desperately needed cash to bankroll King William III’s war against France.
Citizens were encouraged to exchange deposits for hand-written notes that promised to pay the bearer the sum of the note on demand.
History lesson over!
Fast forward to 2016 and we’re edging ever closer to a totally cashless society.
But what will it mean for us? Are we stepping further in the direction of a Big Brother society by doing so?
The infographic below highlights how quickly we are snowballing towards a cashless world.
Privacy in a cashless society
The issue will have conspiracy theorists out in their droves, but, they could have a point.
Governments and their agencies love electronic transactions. Without cash, it’s much harder to hide money from the tax man.
The police and government agencies like the Serious Fraud Office (SFO) love the traceable records that cashless payments leave behind.
France and Spain have already enacted laws that limit cash transactions and it’s now illegal to use cash for anything more than €1,000 in France.
Under a cashless system the markets for undeclared work and drugs could be wiped out and central banks would find it much easier to enforce their monetary policies.
Banning cash may put an end to black markets, but it could become unsettling to to see an end to anonymity on every single transaction we ever make.
Although anonymous digital transactions are possible, it’s hardly likely that governments will give up the chance to track our every move in the name of security.
Once this information exists on records, government agencies will target it – of that there is no doubt in my mind whatsoever.
Police, intelligence services, the tax man, fraud squads, and possibly even marketers could be privy to this information on request.
“Hello I’m calling from Nosey Insurance Ltd. I see you recently purchased a fridge from Currys sir, have you ever considered our white-goods insurance?” No, just no!
If digital cash were to be issued by a government-run bank and inevitably administered by private agencies, you would seriously need to read the small print in any contract you signed to be aware of who your information could be sold to when you bought anything.
Once all payment transactions are tracked, it becomes an Aladdin’s cave of data that we ultimately will have no control over.
What is there to stop a divorce lawyer or government official attempting to gain access to build up a profile of who we are and a case against us?
Will convenience lead to carelessness?
According to Payments UK, which represents major banks, building societies and payment providers, 2015 was the first year in which cash was used for less than half of all payments by consumers.
They believe that debit cards and contactless payments will have exceeded cash usage by 2021.
But with convenience can often come carelessness.
I have many friends who admit to losing track of spending using digital payments methods – I’m not going to lie, I’ve been there myself.
All those small payments on a contactless card soon add up to large sums over the course of a month.
Unsurprisingly 18-24 year olds, who’ve grown up in the internet age, are much less fazed by the new digital ways to spend money.
However, their age group is also twice as likely to not equate these payment methods with spending actual cash.
Not recognising the link between digital money and real cash could lead some to fall into financial difficulty – even more reason for financial education.
As a millennial born in 1981, I’m still horrfied by the thought of contactless cards, I just don’t seem to be able to get on board with them.
Sweden leading the way
It seems strange to even imagine it over here in the UK, but Swedish buses haven’t taken cash for years.
It is absolutely impossible to pay for a ticket using cash on the Stockholm metro, retailers are legally allowed to refuse cash (coins and notes), street vendors and even churches all increasingly prefer card or phone payments.
Maybe even more astonishing, 900 out of 1,600 bank branches no longer stock cash or accept cash deposits.
The Swedes use cards as their form of payment three times more often than the average European.
More recently mobile phone apps, such as Swish, have taken Sweden by storm.
Swish, a hugely popular app developed jointly with the major banks including Nordea, Handelsbanken, SEB, Danske Bank and Swedbank, allows anyone with a smartphone to transfer money from one bank account to another in real time.
It has been adopted by almost half the Swedish population so far!
I can definitely see the benefits, I can also see a lot of holes in a cashless world.
One thing is for sure, we’re heading there with greater speed than ever before – there’s certainly no stopping this revolution.
Would you prefer to live in a cashless society?
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