Increasing numbers of consumers are now choosing to use a card or contactless device to make payments, rather than using physical money. In fact, statistics show that 80% of people prefer spending with a card over cash.
Many people believe that cash will be unnecessary in a few years’ time and that all transactions will become digital.
However, despite most people being comfortable with digital or contactless payments, some people still rely on cash. People on low incomes, the elderly, and vulnerable people are the most likely to still use physical money over cards.
For these groups, it’s becoming harder to withdraw cash as many banks are closing branches and free ATM services. Another barrier is that, since the start of the pandemic, more businesses have chosen to refuse cash payments.
So, is switching a to cashless society a good idea? Here are some of the pros and cons:
The benefits of a cashless society
- During the pandemic, many consumers switched to cash as it’s safer and stops the spread of bacteria and viruses
- Contactless payments are more convenient – especially mobile payments
- Card payments give additional protection when paying for items. Consumers get more security if the retailer goes bankrupt or the item is faulty or not as described
- Cards are essential for online shopping, which makes up a large proportion of purchases
- It could mean lower rates of some crimes, as there is no physical cash to steal
- Reduces the time and cost associated with handling, storing, and depositing cash
The disadvantages of a cashless society
- Many people feel safer using cash in times of uncertainty
- Easier for people struggling to budget and it means they can control their spending, which makes cash more popular with some people on lower incomes.
- Card payments can expose people’s personal information to a possible data breach
- Those without bank accounts or mobile phones will struggle to keep up