If you love convenience, using your phone to make purchases, or organising all your finances online, you’ll be more than happy to welcome a completely cashless society. However, if you prefer using cash as a way to keep track of how much you’re spending, this change won’t be for you.
At present, ATMs are disappearing at a rapid rate of 300 a month, as individuals are choosing to use their cards or smart phones to pay for even the tiniest purchases. One in ten adults in the UK are choosing to live a cashless life, keeping an eye on their finances online instead.
The younger generations vs the older generations
A cashless society will affect different people in different ways. Having grown up in a digital world, younger people are in favour of living a cashless life, with one in six 25-34 year olds choosing to do so. They prefer the ease of tapping their card and going – sometimes within seconds. The older generations, however, may struggle more and might need support to get used to the transition. It’s essential for banks to adapt their offerings so that certain groups of consumers are not left behind.
A cashless society: Pros
In a rush and need to pay for something quickly? A swift tap and it’s done. There are many advantages to going cashless, and here are a few examples:
- Limiting theft: If a pickpocket tries their luck, a criminal breaks in to a business premises or an employee wants to steal, there won’t be any physical cash to take.
- Splitting bills: Out with friends or family and trying to work out who owes what? Banking apps allow individuals to transfer money electronically on the spot.
- Building credit: Making purchases on a credit card may help you to improve your credit score. These are essential for life’s larger purchases, such as a house.
A cashless society: Cons
A completely cashless society would certainly have a negative impact on many businesses and individuals, too. Chair of the Independent Access to Cash Review, Natalie Ceeney, stated that “17% of the UK population – over 8 million adults – would struggle to cope in a cashless society.”
Here are some of the disadvantages of a cash-free world:
- Hacking: If somebody gets into your account and drains your savings, you won’t have any cash on hand as a backup.
- Overspending: When you have physical money in your purse or wallet, you’re aware of every penny you’re spending. But if you’re simply tapping your card for every purchase, you could soon lose track of how much it’s adding up to. In a cashless society, individuals will need to rethink their efforts to manage their spending.
- Inequality: Poorer individuals – and even those without banks – will suffer, as they may not have expensive devices to make payments.