A cashless society refers to a particular kind of economic state wherein all the financial transactions are carried out with the help of digital platforms. Such a society does not involve any kind of financial exchanges in the form of banknotes or coins in their physical form.
People from all over the world have been well acquainted with the concept of a cashless society for quite a significant period of time. However, it is during the modern times of the ongoing 21st century where this particular financial concept has earned an immense popularity as compared to older times.
|Ensures lower criminal activities||Cannot ensure complete privacy|
|Proper management of cash||Cannot ensure complete privacy|
|Makes international payment procedures easier||Can lead to hacking of accounts|
|Ease of daily lifestyle||Common technological issues|
|Ensures easier currency exchange||Does not ensure equality|
|Reduction of tax evasions||Leads to negative interest rates|
|Can lead to overspending|
Advantages of a Cashless Society:
• Ensures lower criminal activities:
One of the biggest benefits which are provided to the individuals belonging to a cashless society is the fact that they ensure complete protection of crucial financial data.
The payment structures which are entirely carried out on electronic platforms ensures complete privacy. The organizations which take complete responsibility of taking care of all kinds of financial information are inbuilt with such security measures which provide complete protection of the same.
Therefore, such highly advanced privacy policies can definitely make sure to reduce the crime rates pertaining to financial aspects to a great extent.
• Proper management of cash:
By using the traditional modes of transactions, a lot of expenses are involved in printing of the various bills along with the coins. Business organizations are required to store their financial assets and seek for more when they run out of the same.
Therefore, the protection of such large amounts of money can become extremely problematic in various ways. It is during such situations that a cashless society comes to the rescue so as prevent the spending of all the paycheck in a wasteful manner.
• Makes international payment procedures easier:
In such situations where an individual is seen to make necessary plans regarding a visit to a foreign country, it is quite obvious that he or she will need to get hold of the local currency. However, it is the concept of cashless society which has made such scenarios much more easier to be handled so that all the international transactions can be carried out easily.
This can be done much faster by using the digital platforms of making the international payments.
• Ease of daily lifestyle:
Digitalized medium of transactions have definitely contributed in making people’s lives much more easier in a number of ways. Such easy modes of payment which ensures complete security have certainly made one’s daily lifestyle extremely easy-going by taking a control on their unnecessary stress over important financial transactions.
• Reduction of tax evasions:
A cashless society makes sure to facilitate such measures that can get rid of unnecessary money laundering as well as increased taxations. Such reductions take place in the field of tax evasions due to the reason that there is a proper mode of paper trail that is followed in a cashless society.
Disadvantages of a Cashless Society:
• Cannot ensure complete privacy:
The traditional mode of transactions can lead to greater criminal activities like stealing of money, bankrupting, corruption and others. But at the same time, a cashless society involving payments done via digital platforms cannot ensure complete protection of the important financial information. It cannot guarantee their privacy measures as far as such digitalized transactions are concerned.
• Can lead to hacking of accounts:
The issue of hacking has become extremely prominent during the present times. Hackers have become extremely skilled at robbing banks which ensure electronic mode of financial transactions. Therefore, it is during such critical situations that cashless society serve as a threat to the digitalized mode of transactions which can lead to a number of inconveniences.
• Common technological issues:
Digitalized mode of transactions often faces a number of technical glitches which can hamper the entire process. One can innocently commit a mistake while making payments online which can lead to a number of serious issues in the near future. Even simple scenarios like a dead phone battery can lead to a dead end while making such online transactions.
• Does not ensure equality:
Such cashless societies can create a negative impact upon the poorer sections of the society who cannot benefit much from such digitalized modes of transactions. This happens because such under privileged sections of the society do not own such costly equipments or do not have the right knowledge to make use out of such modernized techniques of payment structures. This gives rise to the issues of inequality to a great extent.
• Leads to negative interest rates:
In a cashless society, it is quite a common sight wherein the government figures attain the much awaited opportunity of promoting a number of negative interest rates. This can definitely take a toll upon the regular financial expenditures of the people residing in such societies. Such actions reflect an in-depth motive to implement as well as stimulate s number of national economies in the most drastic manner.
• Can lead to overspending:
With the help of such digitalized medium of transactions, overspending has definitely become a challenging issue all over the world. By just swiping or by clicking without knowing, individuals can easily get trapped into unnecessary expenditures that can create a negative impact upon the strategies of saving for the future.
In the ongoing 21st century wherein the entire world is run with the help of digital platforms, transactions have also been modulated so as to take place online. One such concept which has become extremely common during the present times is the presence of cashless societies that is entirely based on the process of monetary transactions being carried out on various online platforms. This system has definitely portrayed its own share of benefits as well as drawbacks upon the society on a global scale.