Cash as we know it, paper money and coins, may soon be a thing of the past. Is that a good thing? Depends on how you look at it. There are definite pros and some very concerning cons to living in a cashless society.
Currently, there are no countries that are 100% cashless although Sweden is pretty close, with less than 10% of people reporting that they have used cash for a recent purchase.1 And other countries such as India are moving in that general direction.1 How long it will take for a country like Canada to be fully cashless, or if that will ever happen, is hard to say. But while we wait and watch, let’s take a closer look at the benefits and the downside of going cashless.
But first…what exactly is a cashless society?
A cashless society is one where goods and services are paid for through electronic means such as debit cards or credit cards, or through payment services like Apple Pay or PayPal rather than hand-to-hand exchange of currency.
The upside to going cashless
There are many good reasons to stop using paper money and coins, including:
- Eliminating the cost of producing and managing currency
- Reducing theft of cash which is often associated with violent crime
- Making money management and budgeting easier by having a digital record of your spending
The downside of going cashless
There are also some concerns about going cashless, including:
- Your personal and financial information being at risk of hacking or data breaches
- Payment service providers charging fees
- No option for payment if there are technical or security issues
How close are we to a cashless society?
We’re already seeing cashless businesses, including theme parks, sports stadiums and even restaurants in urban centres in Canada. Further research shows that in 2024, only 10% of payments made in Canada were done using cash.3So maybe the transition from physical currency could take place sooner than we once thought.
References
- Justin Pritchard. "The Pros and Cons of a Cashless Society." The Balance. Last modified April 27, 2024. https://www.thebalancemoney.com/pros-and-cons-of-moving-to-a-cashless-society-4160702.
- Timothy Moore. "What is a Cashless Society? What Are the Pros and Cons?." Chime. June 17, 2016. https://www.chime.com/blog/top-benefits-of-going-cashless/.
- Amanda Pfeffer. "Canada ’sleepwalking’ into cashless society, consumer advocates warn." Radio Canada. July 3, 2024. https://ici.radio-canada.ca/rci/en/news/2085490/canada-sleepwalking-into-cashless-society-consumer-advocates-warn.
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