Cashless society advantages and disadvantages pdf
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Cash is king! This quote is facing a serious threat as the world is marching towards becoming a cashless society. The recent trends suggest that digital money will soon replace physical cash. Many countries are making active efforts to remove cash in circulation — Sweden is its prime example. In Sweden, Cash is no longer a king!
Cashless Society Essay
A cashless society describes an economic state whereby financial transactions are not conducted with money in the form of physical banknotes or coins, but rather through the transfer of digital information usually an electronic representation of money between the transacting parties. However this article discusses and focuses on the term "cashless society" in the sense of a move towards, and implications of, a society where cash is replaced by its digital equivalent —in other words, legal tender money exists, is recorded, and is exchanged only in electronic digital form.
Such a concept has been discussed widely, particularly because the world is experiencing a rapid and increasing use of digital methods of recording, managing, and exchanging money in commerce , investment and daily life in many parts of the world, and transactions which would historically have been undertaken with cash are often now undertaken electronically.
The trend towards the use of non-cash transactions and settlement in daily life began during the s when electronic banking became common.
By the s digital payment methods were widespread in many countries, [ which? Additionally, payment with a large amount of cash has been actively prohibited by some suppliers and retailers,  to the point of coining the expression of a "war on cash". Venmo allows individuals to make direct payments to other individuals without having cash accessible. Square is an innovation that allows primarily small businesses to receive payments from their clients.
Fewer than half of bank branches in the country conducted cash transactions. A common measure of how close to a "cashless society" a country is becoming is some measure of the number of cashless payments or person to person transactions are done in that country. For instance, the Nordic countries conduct more cashless transactions than most Europeans.
Levels of cash in circulation can widely differ among two countries with a similar measure of cashless transactions. Across the 33 countries covered in the European Payment Cards Yearbook , the average number of card payments per capita per year is In comparison, the average Dane makes This makes card payments in the Nordics two-and-a-half to four times higher than the European average. Even though a cashless society is widely discussed, most countries are increasing their currency supply.
Exceptions are South Africa whose supply of banknotes fluctuates wildly compared to most nations, and Sweden which has significantly reduced its currency supply since China's currency has decreased from to The amount of cash in circulation was much lower in past decades in all countries except Sweden.
The oldest comparative figures at Bank for International Settlements were from and only including the USD and 10 other currencies. Under a Massachusetts law dating back to , no retailer may "discriminate against a cash buyer by requiring the use of credit". Cashless payments eliminate several risks, including counterfeit money though stolen cards are still a risk , theft of cash by employees, and burglary or robbery of cash.
Cash provides a good home for disease-causing organisms i. Staphylococcus aureus. One significant societal advantage cited by proponents is the difficulty of money laundering , tax evasion , performing illegal transactions, and funding illegal activity in a cashless society,  Many countries have regulated, restricted, or banned private digital currencies such as Bitcoin , partly to prevent illegal transactions.
Large amounts of value can also be stored in real estate, antiques, or commodities like diamonds, gold, silver, and platinum. Some have proposed a "reduced cash" system, where small bills and coins are available for anonymous, everyday transactions, but high-denomination notes are eliminated. This would make the amount of cash needed to move large amounts of value physically awkward and easier to detect. Large notes are also the most valuable to counterfeit. Rather than conducting "costly and periodic" surveys and sampling of real-world transactions, "real data" collected on citizens' spending can assist in devising and implementing policies that are deduced from actual data.
With recorded financial transactions, the government can better track the movement of the money through financial records which enables them to track the black money and illegal transactions taking place in the country. As digital payments are made, transactions are kept in records. Cashless payments facilitate the tracking of spending expenditure and record the movement of money.
Having recorded transactions, it [ clarification needed ] can help citizens to refine their budget more efficiently. In a digitized economy, payment made will be traceable. With traceable transactions, institutions would have potential access to this information.
Such transactions allow businesses a way to build a consumer's personal profiles based on their spending patterns. The issue of data mining also comes into place as countries head towards a cashless society. Cashless transactions leave a record in the database of the company as one makes a payment, and this information becomes a way for the prediction of future events.
Through a large number of records, data mining then allows the organization to compile a profile of an individual through its records in the database. Going all-digital, these data retrieved from transactions lead to widespread surveillance where individuals can be tracked by both corporations and the government.
Cashless systems can be problematic for people who currently rely on cash, who are concentrated in certain populations such as the poor, disabled, elderly,  undocumented immigrants , and youth. In the United States, almost one-third of the population lacked the full range of basic financial services. As part of its Smart Nation initiative, Singapore has been moving towards a cashless economy.
Not used to digital payment methods, troubleshooting issues such as managing lost cards or passwords and managing their expenses can create potential trouble for anyone transitioning from cash. When payment transactions are stored in servers, it increases the risks of unauthorized breaches by hackers. Attacks on or accidental outages of telecommunication infrastructure also prevent electronic payments from working, unlike cash transactions which can continue with minimal infrastructure.
Opponents point out that an entirely cashless system, in addition to tracking all transactions, would enable a central government to:. Consumers are less aware of the amount of money they are spending day-to-day when inserting their card to complete a transaction than if they budgeted money into a wallet and paid in cash. Sweden is one of the best examples of the results of efforts to create a cashless society.
Sweden is exceptional in that the amount of cash in circulation has reduced substantially. Swedish society changed profoundly from due to attempts to replace all cash with digital payment methods. The concept of cash-free bank branches began in Sweden between , with a cashless branch being a step towards an upcoming closure of that branch.
From around , Swedish banks began giving special hardware to their customers that could be used to process financial transactions like digital payments of invoices from home. People still had the choice to use cash, however, and those who so wished could still do business in cash at the bank offices that remained. This trend began around , and peaked in connection with the exchange of all Swedish coins and banknotes except for the 10 kronor coin. But for "safety regulations", the maximum amount a bank customer could withdraw was about 5, to 10, SEK per week, and similar "security rules" for deposits were established as well.
Later, all the major regular banks with branches began an enforced process of either closing down branches or making them "cash-free". The limited availability of cash in Sweden has caused difficulties for smaller boutiques, shops, and convenience stores, which depend on cash, as they can no longer deposit their daily takings or obtain any change.
Non-profit organisations, which are very common in Sweden, have also experienced an outsized [ clarification needed ] impact. In response, Swedish banks have introduced a mobile telephone payment system known as Swish.
But this system has suffered from many problems. The banks and initially media as well have dismissed complaints about the change as "a problem for elderly people" only, essentially claiming that some were only struggling to learn new technology, rather than being unhappy with a totally new transaction method.
Opponents of the change, however, contend that the technological excitement has changed too much too fast, saying that many dangers lurk in the reeds.
Concerns have been expressed about a rising number of fraudulent transactions, and the fast development of Quantum Computers contributes to fears of hacking within the system. This movement has quickly grown to a considerable size, with many contributors describing troubles caused by the increasingly hostile attitude expressed by banks against cash.
Because people had been required to pay with phones Swish and cards, there was not enough money available for them to conduct business in their market. From Wikipedia, the free encyclopedia. This article is about the concept of a society which no longer uses cash.
For the Southern African band, see Cashless Society band. Economic state. The Fletcher School Tufts University. Archived from the original PDF on 1 December Retrieved 17 December The Independent. May 21, Archived from the original on Retrieved Some retailers turn noses up at currency".
USA Today. Retrieved 3 July February 8, Retrieved 3 December The Boston Globe. Ars Technica. Bad for Tax Cheats, Privacy, Poor". Bloomberg Businessweek. Retrieved 10 April Frontiers in Microbiology. Future Microbiology. Will D. The Washington Independent. Retrieved 25 August Bank of England. Archived from the original PDF on 29 March Official Inflation Data, Alioth Finance.
Archived from the original on June 25, Retrieved August 25, Bank of Canada.
PTE Essay – Advantages & Disadvantages Of Cashless Society
Humankind has evolved tremendously. It cannot be denied that there have been astounding changes in all facets of human life. One of them is the use of money in how we trade with each other. The exchange of goods through the barter system collapsed when the concept of currency was established. As times changed, the concept of currency moved from coins to paper money, and eventually to cashless forms of monetary transactions. Today, we have reached a situation where a totally cashless society is actually achievable. A recent report by AT Kearney states that the first truly cashless society will be a reality in five years.
A cashless society describes an economic state whereby financial transactions are not conducted with money in the form of physical banknotes or coins, but rather through the transfer of digital information usually an electronic representation of money between the transacting parties. However this article discusses and focuses on the term "cashless society" in the sense of a move towards, and implications of, a society where cash is replaced by its digital equivalent —in other words, legal tender money exists, is recorded, and is exchanged only in electronic digital form. Such a concept has been discussed widely, particularly because the world is experiencing a rapid and increasing use of digital methods of recording, managing, and exchanging money in commerce , investment and daily life in many parts of the world, and transactions which would historically have been undertaken with cash are often now undertaken electronically. The trend towards the use of non-cash transactions and settlement in daily life began during the s when electronic banking became common. By the s digital payment methods were widespread in many countries, [ which? Additionally, payment with a large amount of cash has been actively prohibited by some suppliers and retailers,  to the point of coining the expression of a "war on cash".
At present, the payment system in Thailand changes from a paper-based system to a cashless payment system. A coin has its two sides, so the cashless payment has its advantages and disadvantages. This article describes the general advantages and disadvantages of a cashless society in Thailand in the COVID situation. The cashless payment is able to assist the government for tax collection accuracy and facilitates users to make financial transactions more transparent and efficient. It assists businesses to save time and cost of cash management and reduce the paperwork. The cashless payment made the life of students, housewives, and elderly people very easy to carry out financial transactions and there is no need to meet the financial institution staff. This payment system needs advanced technology system skills, a smartphone, and a technology facility.
Advantages of a cashless society. Reduced risk of crime. Cash tills have often been the source of violent crime. Less tax evasion. Harder for organised crime. Hygiene and virus transmission. Quicker transactions. Reduces spare change. Lower transaction costs for business. Costs of cash infrastructure.
A cashless society might sound like something out of science fiction, but it's already on its way. Several powerful forces are behind the move to a cash-free world, including some governments and large financial services companies. However, no society has gone totally cash-free just yet. In addition to logistical challenges, several social issues need to be addressed before society can give up on cash entirely. The benefits and disadvantages below can give you an idea of the myriad of effects going cashless can have on money and banking as you know it.
Being a cashless society is what most countries are heading to. There are several powerful forces that are actually supporting this transition to the cash-free world. Some of these forces include governments as well as known companies that offer financial services, even Critics of the financial system as well as the government-issued currencies are supporting the transit to a cash-free society.