A cashless world might sound something out of science fiction. However, what you should know is that the world is already on its way. Some powerful forces are behind the move to cash-free world including big financial services companies and governments. Even the critics of mainstream financial system as well as government-issued currencies favor with cashless world.
Cashless World – What Does It Look Like?
Without cash, all payments will be done electronically. Rather than using coins and paper to exchange value, you authorize fund transfer to another business or person. The logistics are developing, but there are some hints on how cashless world could evolve.
- Cryptocurrencies – They are already being used for money transfers and they introduce innovation and competition that can help keep the costs low. However, they have regulatory hurdles and risks that make them a bit impractical for majority of consumers, so they might be not be good for widespread use.
- Mobile Payment Services – Mobile devices are used for cash-free payments through apps or online services.
- Electronic Payment Apps – These are helpful for the P2P payments. Aside from that, the bill-splitting apps enable friends to split their bills in a fair and easy manner.
- Debit Cards and Credit Cards – These are among the known cash alternatives today. However, cards alone are not enough. The mobile devices will likely be a primary tool for the payments.
Advantages of a Cashless World
- Paper Trails
Financial crimes must dry up. It’s difficult to evade taxes and hide income when there is a record of each payment you get. Money laundering is much harder if the fund’s source is available.
- Less Crimes
With cash, it is much easier to steal money, whether the amount is small or big. Illegal transactions usually take place with cash so there is no transaction record and so the seller may be certain that he or she will get paid.
- No Cash Management
To print coins and bills, it costs money. Businesses have to store money, deposit cash when they have, and get more once they run out. Moving money and protecting a huge amount of cash is now a thing of the past with a cashless world.
Disadvantages of a Cashless World
Depending on one’s perspective, going cashless can be problematic. Some of the disadvantages of a cashless world include the following:
- Hacking
Hackers are muggers and bank robbers of the cashless world. The consequences in a cashless world are higher if someone drains your account because you do not have alternative ways to spend. Even if you are protected under federal law, you might still face some inconveniences after a breach.
- Privacy
Electronic payments may mean less privacy. You might trust organizations that handle your data and you might not have something to hide. However, your payment information might turn up in ways that can be impossible to predict. Cash enables you to spend money and get funds anonymously.
- Fees
If you are forced to select from just some payment methods, a payment processor can just cash in on high volumes. It gets rid of the savings that must come from handling less cash.