Does ‘Cash is king’ still rings true in our modern world? Perhaps this popular phrase is diminishing in importance as we move towards an increasingly cashless society.
In many countries, the usage of cash is declining. It is believed that about half of financial transactions that we engage in are now cashless. Credit and debit cards as well as digital wallets are our preferred choices and it is definitely impacting how we live in a modern society.
Is this shift towards digitization of money really good for us? There are obviously many benefits of going cashless since so many of us have come to rely on digital money. For instance, conducting transactions with digital money is fast and convenient. Yet, we should also be concerned with issues such as data security and digital wallet security.
So, in this short post, let’s take a look into some of the pros and cons of using digital money. After all, should we not understand what going cashless really means and whether it’s truly the future we want.
Pros of Going Cashless With Digital Money
Unlike physical paper cash, consumers are increasingly keeping more money in digital wallets, and other forms of online platforms. Banks are also constantly pushing more customers to use e-banking services.
There is no doubt that this technological advancement has brought forth many practical benefits to society. For example, digital money enables instant transmission of money over the Internet. Without this technology, billions of us around the world would not be able to participate in international e-commerce transactions.
Cryptocurrencies like XRP are also revolutionizing how we transfer money across international borders. The blockchain innovation, which was brought into the mainstream by Satoshi Nakamoto with his Bitcoin invention has now made true peer-to-peer payments possible without the need to trust a middleman like a bank.
Many people also probably do not realize that a cashless society makes a city safer to live in. When people and shops carry less cash around, robbers will have less motivation to violently steal from people on the streets. The thieves, robbers and scammers are of course still around but they now mostly ply their devious trades online.
Is Going Cashless Good For Us?
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Perils of Being Cashless Dependent
While digital money offers convenience and even makes our societies safer, most people probably do not foresee the risks of over reliance on digital money.
For starters, security is a crucial concern with any digital systems. You’d have probably heard some people complaining about needing to jump through multiple hurdles to access their digital assets or money. However, these people do not realize that programmers need to implement strict security steps because digital systems are always susceptible to hacks.
It does not matter if it is your e-banking platform, e-wallets or other forms of digital storage like your cloud service where you store your files. They are all vulnerable to hacking, phishing, and malware. A single security breach can result in substantial financial and data losses for users.
Additionally, reliance on digital systems increase the risks of outages or system failures, which could disrupt access to money in emergencies. It does not take a major natural disaster or even an act of war to disrupt the complex computer systems that our societies have come to depend so much on.
Central Bank Digital Currencies (CBDCs) introduce another set of concerns particularly with data privacy. These government-issued digital currencies can erode citizen privacy as every transaction can be monitored and recorded by central authorities. This level of surveillance raises fears about potential misuse, such as restricting access to funds or targeting individuals based on their spending habits or demographics.
These pitfalls highlight the need for balanced regulation and robust technological safeguards as digital money becomes more mainstream. Paranoid users might try to resist the advancement towards a digitized society by sticking to good old cash and coins but it will definitely prove to be a uphill task especially if you live in a modern technological driven smart city.
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Conclusion
Going cashless is more than just a trend. It’s a shift in how we use money every day that could profoundly affect how we live.
Technological innovations such as online banking and digital wallets have made it very convenient to spend and access money anywhere. In addition, digital money saves time, reduces the need for physical contact, and can even help track spending more easily.
However, it’s important to recognize the challenges that come with going cashless. Digital systems can fail and your online accounts can be hacked, putting your personal data and digital money at risk.
As we move forward in a technological driven society, perhaps it is not such a great idea to eliminate cash completely. Instead, citizens should demand for a financial system that offers both flexibility and security. A practical approach would give people the choice to choose what works best for them.
In the end, going cashless can be good for us but only if it’s done thoughtfully and includes everyone.
