Are we moving towards a cashless society?
COVID 19 is accelerating the trend towards contactless payment on cards and mobile phones. Contactless payment has become the norm for transactions from buying coffee to purchasing groceries. Claims that we could soon be a cashless society are not so far-fetched
Indeed, COVID 19 could hasten the demise of cash.
COVID 19 can be transmitted by contact. People are aware of this and instead of paying cash, have chosen to pay for their transactions by card.
What is the meaning of cashless society?
It means that all financial transactions are not done materially with notes or coins. They will be done through the transfer of digital information. Already this is common with on line banking.
There are advantages and disadvantages with this move towards a cashless society.
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Link chief executive John Howells said “the use of cash to pay for goods and services was on the decline in recent years and the COVID 19 crisis is only speeding up shoppers moving away from coins and notes”. “If we do nothing, we could be in a virtually cashless society in two years' time”.
COVID 19 can be transmitted by contact. People are aware of this and instead of paying cash, have chosen to pay for their transactions by card.
What is the meaning of cashless society?
It means that all financial transactions are not done materially with notes or coins. They will be done through the transfer of digital information. Already this is common with on line banking.
There are advantages and disadvantages with this move towards a cashless society.
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The advantages of a cashless society
- On line banking means customers can view their account on screen and be aware instantly if there are any unauthorised transactions.
- Contactless card purchases under £45 do not require the PIN number to be inputted. Useful if inclined to forget the PIN number, or have difficulty using the card key pad.
- No exchange of cash needs to happen between customers and staff dealing with the transaction.
- People can avoid carrying cash, so money cannot be lost or stolen.
- Credit/debit cards have a limit set for withdrawals.
- Making a payment by card can corroborate that the payment has been made.
The disadvantages of a cashless society
- When making a payment physically by cash it makes you more aware of the amount you are paying out. Paying by debit or credit card could exceed your limit causing you to have fees and charges applied.
- If the contactless card is lost or stolen anyone can make purchases on the cards until it has reached the limit. (If your card is lost or stolen it must be reported to the card provider immediately to limit your liability).
- Anyone on a low income needs to be in control of their money. If making payments by direct debit, they need to ensure there are sufficient funds to cover the payment. Otherwise charges may be incurred that they can ill afford.
- Older members of society may prefer to make payments using cash.
- Vulnerable people may be taken advantage of if they do not fully understand how transactions are completed.
- Victims of domestic abuse who have no access to cash have less control of their finances.
- Some people like to pay a gratuity in cash or put cash in a greeting card as a gift.
- How can the future generation get an understanding of the value of the notes and coins if they do not handle them?
Link chief executive John Howells said “the use of cash to pay for goods and services was on the decline in recent years and the COVID 19 crisis is only speeding up shoppers moving away from coins and notes”. “If we do nothing, we could be in a virtually cashless society in two years' time”.