The idea of a cashless society, is it really such a good idea? Experts agree that it is, but looking at the data when it comes to crime, paper trails, cash management, bank fees, and identity theft, is it really a good idea? Although the advancement to a cashless society is futuristic, a few things must be addressed so society can be successful in this transition.
One of the main reasons for this idea to have risen was because of crime. Crime has always been an issue in society. Mr. Justin Pritchard has a valid point when saying,
With cash, it’s easy to steal money, whether the amount is large or small. Also, illegal transactions (drug trade, for example) typically take place with cash so that there’s no record of the transaction—and so that the seller can be certain about getting paid. (Pritchard)
While this is true, most fail to realize that all that is being done is breeding a new kind of criminal. Crime is always one step ahead of everyone else. This can be shown by the reason technology is always being hacked in one form or the other. Criminals must be constantly changing in order to avoid capture.
The second reasoning for this movement would be for established paper trails. Paper trails are crumbs that lead back to a suspect. The problem with actual physical paper trails is that they can be destroyed by means of fire, water, shredder, etc... With a digital paper trail, it would be much harder for them to be destroyed.
This will help end white collar crime in the sense that, there will be a record of every transaction made. It will also be much harder to hide from anyone who knows where the money will be coming from. (Pritchard) But, as I had mentioned before, criminals will eventually find a way around this. It is inevitable.
The cashless society idea threatens the ‘little man.’ Some people have small jobs they do on the side for a little extra cash. Mowing a yard, cleaning out gutter, or chopping down a tree. These things will disappear, for fear of the government catching them not paying taxes on the $20 they paid to little Bobby for mowing and elderly women's yard. It will hurt the economy in general. If people cannot make extra money, then the spending will stop, forcing people to hoard their money.
Another issue that arises is people who do cash budgets are at risk. Some people cash their check and take it all out of the bank. Once out of the bank it is placed in envelopes labeled with items for spending on them. The people only spend that amount of money on what is marked on that envelope. This is called the envelope system, and is considered to be the best budgeting system by the millions of people it has worked for.
The most worrisome issue that needs to be addressed is what Mr. Vishal Marria expressed is his article.
However, with digital payments and no cash, people would be unable to withdraw money from the financial system, meaning governments and banks could leverage greater control of the economy through monetary policy. Specifically, the implementation of a negative interest rate during economic downturns could be brought in, whereby people would pay banks to store their deposits, instead of earning interest on those deposits. This aims to stimulate more lending from banks and increased investment by businesses, as well as encouraging people to invest, lend and spend instead of amassing money. (Marria)
Banks will literally control the world. This is a grave issue, due to having no other option to place your money. The consumer will be forced to place their money in a bank, subject to their rules. They will have no say in what the bank decides to charge. This has been seen in the car insurance industry. It is against the law for someone to drive a car without insurance. Insurance companies know this so, they charge whatever they want, because they know you must have it or risk going to jail. This will be worse, simply because there will be no other option. At least with car insurance you can drive without it, but it is a different story with the latter. Either you have a bank account, or you do not receive payment for your work. It will not matter how much you work, but if there is no way to pay you then it was all for nothing.
Another pressing issue is that people will not be able to hide cash in case of an emergency. Everyone has their little place they stash cash like a can tucked back in the spice cabinet or in a trash bag under the closet floor board. This is for an emergency for when they cannot reach the bank or an ‘apocalypse’ type scenario. If there were to be a terrorist attack where they knocked out power, the banks would be down, and no one would be able to withdraw money.
Then the final issue regarding a cashless society would of course be identify theft. This is a rather large issue now. Seeing that people will have their entire savings, retirement, paycheck earnings all in one place makes it incredibly easy for theft. All a person would have to do is hack one person’s account and get everything. The only way to counter act this would to be to have two bank accounts. As David Reid from CNBC mentions, if an older or mentally sick person has trouble with technology (Reid), they might seek out help. This makes these people a target for identity thieves.
In conclusion, it must be said that although the idea of a cashless society might be nice, society is not ready for such a thing. One could also venture to say that technology is not either. The bad seems to out weight the good on this matter. There is not much good that can come out of this switch. The studies have shown that it might help crime in the short run but become a major issue in the future. Paper trails will vanish, but how long will it be before criminals find a way around this? The ‘little man’ has will still be struggling if not more. Identity thieves will rule the world alongside the banks. This switch does not look to be a smart move.
Maria, Vishal. “What a Cashless Society Could Mean for the Future.” Media LLC. 21 Dec 2018. Web. 08 June 2019.
Pritchard, Justin. “The Pros and Cons of Moving to a Cashless Society.” The Balance. DoTdash. Web. 24 February 2019. 04 June 2019.
Reid, David. “Millions Would Be Put at Risk in a Cashless Society, Research Warns.” CNB.NBC Universal. 19 December 2018. Web. 08 June 2019.