May 04, 2021

The Decline of Cash

Cashless society might sound like something that comes from a science fiction movie, but realise it or not it’s already on it’s way right now. Several forces are behind the move of this cash free world. Including some governments and big financial service companies. However, there isn’t one society that has gone totally cash-free yet.

What does a cashless society look like? Without cash, all of the payments happen electronically. There is no longer paper or coin to exchange value, instead there is transfer-authorization of funds from one bank account to another bank account. Credit and debit cards are the most popular cash alternatives today. But cards might not be enough tools to support 100% cashless society nowadays. So there are some Electronic payments applications and also Mobile payment services to support that. Lately, cryptocurrencies are included to be a part of the discussion, and might be the future of digital cashless society.

Since the arrival of Covid-19 pandemic, people have switched to a contactless method of payments. They tend to avoid touching germs that are nested on conventional paper or coin money. Of Course this pandemic speeds-up the cashless society status. To keep up with the new way of transaction, many business vendors change or reevaluate their operating models. The New York Times reported that 40 millions people went online for groceries in April, 2020.

Benefits of a cashless society, those with the advantage of going cashless will likely find that it’s more convenient than using cash. You don’t need to bring any wallet or cash, as long as you have your phone or cards, you have all instant access to all of your cash. It’s not only convenient, going cashless could lower crime rates. Carrying cash makes someone an easy target for criminals. Once the money is taken from your wallet it will be difficult to track and prove that cash is yours, this thing is impossible to happen if one society went totally cashless. Similarly, financial crime should also be reduced down in a cashless society. Illegal transactions, such as illegal gambling and drug transactions typically use cash so it leaves no trace behind and the money is easier to launder. Money laundering becomes much harder in a cashless society, also it will be hard to hide income and evade text when there’s always a record on every transaction.

There are two main benefits in terms of cost with cashless. Going cashless is not only convenience for so many people. It cost money to print bills and specially coins. Businesses need to store money, get around when they run out of it, also they need to deposit cash when they have too much of it in hands. Spending time, resources, and money could be reduced when going cashless in the future. Cost and time-wise, it’s more efficient to be cashless for business instead of using conventional cash itself. The second thing is, imagine when the whole world or just the country that you visit accept all forms of cashless transactions. What will happen? You don’t need to exchange Rupiah or Dollar to the local currency. We don’t need to worry about the exchange rate or how much local currency you need to bring under one bag. It will be efficient and more convenient.

But, there will be another dark-side of going cashless globally. There will be other problems on the exchange of so-called digital society. Digital transactions sacrifice privacy of the user. Electronic payment isn’t as private as cash payment, those organizations or companies will handle lots of users data, they might have nothing to hide but at the end of the day, the more data floating online, the chance of it winding up in random hands gets higher. Not only that, going cashless does not guarantee that your money is 100% safe, cyber crime is a real thing and it threatens people who use digital money regularly. There are so many scams and tricks that cyber crime could use to manipulate user’s data and they could possibly get the access to steal from someone’s digital wallet.

In the digital world, hackers are the bank robbers. In a cashless society you’re more exposed to hackers than robbers, from carding, data stealing, to wallet drain. All of those things often happen for real. Even if you are protected under the law or protected by digital financial company security, it is still hard to restore the financial standing after a breach.

Technological problems also happen when we go cashless.Glitches and mistakes as wrong clicks might possibly happen. When we can move our money freely with buttons, these mistakes cannot be avoided. Even as simple as dead phone battery and program malfunction could leave you penniless. Online transactions that could be made with one simple click also leave the user's chance to be an impulsive buyer. Easy way to spend your money, it means an easy way to become someone with impulsive buying behavior. Let me honestly ask you one simple question. Which is more convenient between going to a place to buy something that we want, or online shopping with one simple click to get what we want to be delivered to our front door?

Depending on the perspective, going cashless may actually be more problematic than beneficial. But on the other hand, going cashless is totally more efficient. At the end of the day, we need to use technology wisely, instead technology could abuse us. So will you hope the world goes to a totally cashless society? Or do you hate it when this thing is already happening and going so fast.

Looking to build a financial and payment platform? Contact us now!

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Galo Solutions is a Technology & Creative Company located in Jakarta Indonesia. A one stop solutions for digital and design needs! Galo Solutions focus our works on website design and development (both Native and Wordpress), branding and logo creation, Search Engine Optimization (SEO), Photography and Videography, Instagram and Social Media Marketing and Management, UI/UX Design, Android and iOS Development, Content Creation, and Graphic Design. We build brands and grow businesses through creative and technological solutions suitable and customized for each of our clients and partners.

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