Cashless Society
Cash is Going Virtual: More convenience or just more surveillance?
Cash is losing relevance as a payment method. This development can for example be seen in countries like Sweden where bills and coins just represent 2 % of GDP compared to the Euro area where it accounts for 10 %. The ongoing elimination of large-value bills worldwide underlines this development, e.g. the planned issues stop of the 500 Euro bill.
Key drivers of the change towards a cashless society are opportunities to lower costs, to improve convenience and possible crime prevention effects. Cost savings arise from a reduction of the logistics of cash, specifically transport and safe storage. New convenient payment methods, such as mobile payments and contactless card payments are also rising, making it easier to let go of cash. The crime prevention effect comes from the fact that without cash some crimes, such as tax evasion, illicit work, drug transactions and bribery, are more difficult and expensive to commit.
Differences in adoption of cashless payments are large. The reasons range from lacking financial services and technology, to the fact that some cultures place a high value on notes and coins as such. For instance, in Japan cash is an important cultural symbol, with an important role in religion. Thus 86 % of payments are made in cash compared to 75 % worldwide. Moreover, the rise of cash less societies brings concerns for privacy as transactions become traceable.
FUTURE FACT
In January 2016, Deutsche Bank CEO John Cryan predicted that cash will be eliminated within 10 years.