What is a Cashless Society and its Advantages and Disadvantages?

Sunday, September 6th, 2020, 9:29:50 AM

Cashless payments in the form of bank cards have been available from mid 80s. But only after the internet revolution and the advent of smartphones has there been talk of a cashless society. This is a society that does not use the paper money nor coins but only:

  1. Banking cards – the most widespread cashless payment. They can be Credit or Debit.

  2. Electronic payment apps - Zelle, PayPal and Vemno are all person to person payment apps. Here one can also add the usage of vouchers as an excellent way of avoiding banks.

  3. Smartphone applications – Apple Pay, Samsung Pay Mini, usually connected with your bank account. They are becoming more and more popular.

  4. Crypto currency – in a way it is gambling. It is a risky, unstable market that is still finding its place in the world.

Currently, a large part of the world is using these cashless options, but nowhere has yet tried going 100% cashless. There would be many advantages as well as disadvantages to such a society and we will discuss a few of them.

Can we imagine our grandparents buying bread with their smartphone? Should our five-year-old kids have smartphones just so they can purchase an ice-cream? What will happen to piggy banks, and the excitement of breaking one open?

On the other hand, imagine saving money only by paying the exact amounts, or not worrying about the viruses and bacteria that live on coins and paper? Especially now with COVID 19. Is the solution in the old Greek moderateness or is it time for another quantum leap in payments akin to replacing barter with cash? In the following text, we will give you some serious pros and cons for a cashless society.

Advantages of a cashless society

Having a card or a smartphone makes you an eligible member of a cashless society. Convenience is not the only benefit. We divided the advantages into social - the impact on the whole society, country and world; and personal - the impact on you as an individual.

Social advantages would be

  • lower crime rates,

  • fighting tax frauds and laundering dirty money,

  • ease of currency exchange

  • money saved on printing and managing cash

Personal advantages are:

  • keeping all your money with you on your phone safely locked,

  • paying the exact amounts which will lead to bigger savings,

  • more hygiene that helps prevent the spread of disease.

Cashless society – Octopus reader on KMB bus

Lower crime rates

Makes it kind of impossible to go in a store and get the cash, if it is a ’’no cash’’ store. Sure, this will not stop holdups completely, there are jewelry and other valuable stores to be robbed. However, these usually have higher security and they are not so accessible. Also, when people buy drugs or weapons, cash is the usual medium of exchange. No cash, no drugs, no guns, safer streets.

Tax fraud and laundering money

When there is a record of each transaction these two cannot exist. Financial crime is a very tough battle that countries have been fighting for decades. And it is our tax money that is paying for this fight. Thus, we can only hope that a victory would lead to lower taxes, or better hospitals, schools, and similar institutions that benefit society.

No dealing with currency exchanges

A dream for all frequent travelers. You get off the plane and get in a taxi, press your phone to a machine and get to your hotel. No desperate search for an airport exchange office that offers decent rates. Or dealing with dodgy characters in sunglasses in the hope that they’ll rip you off for less than the official exchanges. An exceptionally clean solution for an easier journey.

No management of cash

Someone has to move cash, to deposit it, to ask for it, to print it, to store it and to protect it. There is a whole industry around it. Only the last year this industry cost the UK around £5 billion.

Storing all your money with you

This is pretty handy, especially when you are far from home and you need to make some sort of emergency payment. Or you got a deal for a car, bicycle, awesome camera, or you simply you want to go for a splurge. Having all that money on your phone is convenient.

Paying the exact amounts

‘’If you don't save the penny, you'll not have the dollar.’’ – Jewish saying

How often do you say that something costs $89 instead of $89,79, which is closer to $90? And how many times a day this happens? There is even a Penny challenge that shows us that by saving a penny on the first day, two pennies on the second, three on the third, up $365 on the last day, you can save $667,95.

A bag of change – cashless payments equal exact payments

With cashless payment you always pay the exact amounts to the penny, thus you save without noticing. Something to think about!


COVID 19 is not the first, nor it is the last pandemic, or even virus, our world has experienced. Many diseases transfer through paper money and coins. Bacteria and germs can live on them for days. And imagine how many people do not wash their hands after buying their first cup of coffee?

True, our smartphones are not the cleanest. But usually we are the only people touching them, so the risk of transferring diseases is low.

It makes you wonder really how we survived all these centuries with coins and paper?

Disadvantages of a cashless society

Do you keep a certain amount of cash in your wallet as a way of saving? If you carried more cash, would you spend it without noticing?

Or maybe you are among the 8 million people that do not have a bank card? Are you homeless and depend on coins on the street?

These are only a few minor disadvantages that we are facing in a cashless society. Let us take a look at what the cons of living without cash are.


People will always judge, especially the government, if they now how you spend your money. The government will want to impose some more taxes, obligations, because if you can buy that Mercedes Benz then you can spare some money for your country, right? It does not matter if you were saving money for years for that piece of luxury.

Also, many online purchases lead to annoying targeted marketing. Iimagine the amount of it when all your purchases are made with electronic money? Invasion of Privacy is a big issue that will be hard to overcome.

Difficulties for the poor, the elderly, and those without a bank account

When Millennials reach old age, a cashless society might be the norm. But now it is hard to imagine people born in the 40s of the previous century clicking on their phone in the words they do not understand or cannot see. There is also a big part of our world of people that cannot buy or do not want to use smartphones or bank accounts. You would be surprised that only in the UK in 2017 there were 17 million people that did not have a bank account. Imagine all the mistakes they would make when they start using cashless payment. There would be some serious loss that could have fatal consequences.

Hacking risks

Another important disadvantage is hackers. Having all your financial data online makes you very vulnerable and prone to their attacks.. The safety of a bank sounds a bit more inviting than this online world.

One of the solutions can be keeping your money in online vouchers that would be on your name. Or in cryptocurrency.

Technological issues

Something as simple as your battery running out could leave you penniless in the street. Or there can be something wrong with the trader’s terminal. This all adds up to lost time for you, and lost revenue for merchants.

Payment providers

Instead of buying a nice wallet to keep your money, you would need to pay a monthly fee for the same purpose. The providers can start playing around with numbers and this can turn out to be an expensive game.


Tap, click, swipe – it’s easy to lose track of the amount spent. When you have money in your had, an exact amount, you cannot spend more.

Countries that tried out some of the cashless society

Few countries tried getting near to this kind of society and they have shown us that even the most developed countries are not ready to go completely cashless.

No Cash Please – a sign in a Pizza place saying “Cards Only”


This is one of the most developed countries in Europe. A perfect health system, family organization, 6 hours working time, and a lot of cold weather that keeps them a bit more indoor than out shopping. Thus, they were perfectly ready to simplify their life with cashless payments. There has been good uptake among the population living in cities. However, the older ones and the ones less interested in modernization keep to the cash.


This is a country completely the opposite of Sweden. It is big, unorganized country with a dense population and a lot of people living below the poverty line.

It also has a big crime problem. In an attempt to combat this, 500 and 1000 Rupee notes were withdrawn from circulation. The move was not a success.


Again, a vast country with a lot of inhabitants, but better organized then India, especially the coastal parts. More than 50% of people shop online using cashless options. China is very digital, one of the reasons is that their industry produces cheap but very functional phones and that free internet can be found easily, especially in the cities. However, the problem is the government imposing itself and invading privacy.


These examples show that it is a bit too early for a 100% cashless society. However, society should be enriched with more cashless ways of payment, since until now bank cards are still the most common option.

The changes will not happen overnight, as the disadvantages we outlined need to be tackled first. But for those of you who are comfortable with technology, there can be real advantages to going cashless!

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