A cashless society exists when financial transactions are conducted not with money in the form of physical banknotes or coins, but rather through some other means. Cashless societies are not new and have existed for over 8,000 years (since Ancient Mesopotamia times). Although historically cashless societies were based on bartering, today cashless transactions are predominantly done using electronic funds transfers or digital currencies.
The advantages of a cashless society include:
- Improved efficiency and convenience – it speeds up transaction processing and payment times.
- Increased transparency – all monetary transactions are recorded.
- Improved hygiene (especially for food retailers) – handling cash notes and coins can be unhygienic and this is especially important where food and money is being handled at the same time.
- Reduced tax evasion – the black/cash economy is reduced.
The perils of a cashless society include:
- Lack of privacy – Consumers’ every transaction is tracked and analysed by government and businesses.
- Increased risks of financial cyber-attacks and digital crime.
Although no country in the world is yet 100% cashless, every country is gradually moving in that direction. Sweden is the most cashless society with only 1% of the value of all transactions made in cash and coins. Most Swedish stores don’t even accept cash as payment for their goods and have signs stating this fact.