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A cashless society: benefits, risks, and issues on JSTOR

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A cashless society: benefits, risks, and issues, British Actuarial Journal, Vol. 23 (2018), pp. 1-16

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Potential negative effects of a cashless society

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Purpose - In the past few years, several countries have begun to drastically change their economies to be entirely cash free. The point of this policy change is to hopefully prevent the amount of crim

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A cashless society is an economic system where transactions occur digitally through credit and debit cards, mobile payment apps, and online banking, minimizing or eliminating the use of physical cash.

Many countries have increased their reliance on digital payments, especially after the pandemic, as businesses and consumers look for faster and more convenient ways to handle transactions.

Sweden is one of the most advanced cashless economies, with over 90% of transactions conducted digitally. In China, mobile payment platforms like Alipay and WeChat Pay are widely used, making cash much less common in urban areas.

While a cashless economy offers benefits such as efficiency and security, it also raises concerns about financial inclusion, privacy, and dependence on digital infrastructure.

In this blog, we explore the pros and cons of a cashless society, analyzing its impact on businesses, individuals, and economies worldwide.

What Is a Cashless Society?

A cashless society is a system where people don't use physical money like coins or notes. Instead, all payments happen digitally.

You might already be living in one without realizing it-every time you tap your card or scan a code, that's a cashless transaction.

Some common examples include credit and debit cards, mobile wallets like Apple Pay or Google Pay, and even QR code-based payments.

Cryptocurrencies like Bitcoin also fall into this category, though they're still not used everywhere.

Countries like Sweden, South Korea, and China are leading this shift. In Sweden, many stores don't even accept cash anymore.

The goal is to make payments faster, more secure, and easier to track-but it also raises questions about access, privacy, and reliability.

How a Cashless Economy Works

How a Cashless Economy WorksAt the core of a cashless economy is digital infrastructure-apps, cloud platforms, APIs, and secure networks that move money instantly.

Banks still play a big role. They handle digital accounts, link debit and credit cards, and often power the backend of many payment apps.

Fintech companies push the experience further. Think of apps like PayPal or Square-they make payments easier, faster, and more user-friendly.

Mobile wallets and banking apps are now everyday tools. Most people can pay bills, transfer money, or split dinner using just their phone.

On the government side, many countries now offer tax payments, fines, or even subsidies through digital methods.

For businesses, it's all about speed and tracking. Digital payments help manage cash flow and improve reporting without waiting for manual entries.

Everyone-from big banks to tiny vendors-has a part in making the system run smoothly.

Pros of a Cashless Society

A cashless economy significantly benefits individuals, businesses, and governments by enhancing efficiency, security, and economic transparency.

Digital payments are becoming increasingly common, with seven out of ten consumers stating they can manage without cash, while half of all merchants expect to stop accepting cash by 2025.

Cashless systems enable faster payments, improved financial management, and streamlined business operations as more transactions shift online or to mobile platforms.

Below are some primary advantages of transitioning to a cashless society:

1. Faster and More Convenient Transactions

Cashless transactions eliminate the need to count cash, handle change, or wait in long queues. Whether tapping a card, scanning a QR code, or using mobile wallets, digital payments make purchases seamless and reduce wait times at checkout.

This benefits high-traffic areas such as retail stores, public transportation, and online shopping, where businesses need to manage customer queues efficiently.

For example, most forms of public transportation in Sweden have gone cash-free, accepting only card or mobile payments. The country has adopted digital payment methods like Swish, a mobile payment app millions Swedes use.

Moreover, mobile payment platforms like Apple Pay, Google Pay, and PayPal further simplify transactions by allowing users to pay instantly with a smartphone.

The ease of digital payments encourages a smoother consumer experience, making everyday purchases quicker and hassle-free.

2. Reduced Crime and Theft

One of the biggest advantages of a cashless society is the lower risk of theft and crime. Without physical cash, businesses and individuals are less vulnerable to robberies, and employees handling money face fewer security threats.

For instance, the move toward digital payments in China has led to a noticeable decline in cash-related crimes, as fewer people carry cash.

Similarly, large-scale events like the Coachella Valley Music and Arts Festival use cashless payment systems with RFID wristbands.

These wristbands let attendees make purchases and access event areas without carrying cash or cards, reducing the risk of theft and fraud while improving transaction speed and security.

By removing cash from transactions, businesses and individuals can operate in a safer environment.

3. Improved Financial Tracking and Budgeting

Digital transactions create an automatic financial record, making it easier for individuals and businesses to track expenses, analyze spending habits, and budget effectively.

Unlike cash, which can be easily lost or spent without documentation, digital payments provide clear statements and transaction histories.

Budgeting apps like Mint, YNAB, and PocketGuard connect with bank accounts to provide real-time financial insights, helping users track spending, budget effectively, and manage their money.

For businesses, digital records simplify accounting processes, reducing errors and making tax reporting more efficient. Consumers and businesses can improve money management and financial planning with a digital financial footprint.

4. Lower Operational Costs for Businesses

Handling cash involves additional costs, including storage, transportation, and security. Businesses that transition to cashless transactions can significantly reduce these overhead expenses.

Cash management costs US businesses billions annually in labor and security measures, making digital payments a more cost-effective alternative.

Many retailers and service providers now prefer contactless payments because they eliminate the need for cash drawers, change counting, and frequent bank deposits.

5. Increased Tax Transparency

A cashless economy improves tax compliance by creating a digital trail for transactions.

Unlike cash payments, which can be easily underreported or hidden, digital payments leave records that financial authorities can audit. This helps governments reduce tax evasion and increase revenue collection.

Countries like India and Sweden have implemented policies encouraging cashless transactions to combat the shadow economy. India's demonetization initiative in 2016 led to a surge in digital payments, reducing the use of untraceable cash in illicit activities.

With greater tax transparency, governments can allocate resources more effectively for public services and infrastructure development.

Cons of a Cashless Society

While digital transactions offer convenience, security, and efficiency, the impact of a cashless society also comes with significant challenges.

Specific populations, such as elderly individuals, low-income communities, and those in rural areas, may struggle with the shift away from physical cash.

Additionally, privacy, cybersecurity, and system reliability concerns highlight the risks of relying entirely on digital payments. Below are some of the significant drawbacks of going cashless:

1. Digital Divide and Financial Exclusion

Not everyone can access smartphones, banking services, or reliable internet, making digital payments inaccessible for specific groups.

Unbanked and underbanked individuals, often from low-income or rural communities, may struggle to purchase if businesses stop accepting cash. Older people, who may be less familiar with digital payment methods, face challenges adapting to a cashless system.

For example, in India, the push toward digital payments following the 2016 demonetization policy left many rural communities struggling due to a lack of internet access and digital literacy.

Similarly, in the United States, an estimated 4.5% of households (around 5.9 million people) were unbanked in 2021, meaning they had no access to traditional banking services.

An utterly cashless economy could further widen financial inequality, making it difficult for vulnerable populations to participate fully in economic activities.

2. Privacy Concerns

In a cashless economy, every transaction is recorded, raising concerns about personal privacy and data security. Unlike anonymous cash transactions, digital payments leave a digital footprint that governments, corporations, and financial institutions can track.

This level of surveillance can lead to concerns about how transaction data is used, stored, and potentially exploited.

Countries like China, which has a highly digitalized payment system, have also implemented social credit systems that monitor financial behaviors. While intended for security and financial regulation, such systems raise ethical concerns about personal freedoms and data control.

Additionally, tech companies handling vast amounts of consumer financial data may use it for targeted advertising, reducing consumer privacy.

3. System Failures and Outages

Reliance on digital payments means transactions are vulnerable to technical failures, cyberattacks, or power outages.

A cashless society depends on stable internet connections, payment processing networks, and digital infrastructure. If these systems fail, individuals and businesses may be unable to complete essential transactions.

For example, in June 2018, Visa experienced a major outage across Europe that lasted for ten hours, affecting 5.2 million card transactions. In the UK alone, 2.4 million transactions failed, leaving people unable to pay for essentials during peak hours.

While the failure was due to a hardware issue rather than a cyberattack, it disrupted payments at restaurants, retail stores, and transportation services, highlighting the risks of digital dependence.

Similarly, power and internet disruptions can prevent people from accessing money during natural disasters or emergencies. The inability to use digital payments in these situations emphasizes the potential dangers of over-reliance on technology for financial transactions.

4. Overspending and Debt Risks

Digital payments make spending effortless, often leading to reduced financial awareness and increased debt risks.

Unlike cash, where individuals physically see money leaving their hands, tap-to-pay or mobile transactions create a disconnect between spending and financial consequences.

MIT researchers found that consumers tend to spend more when using credit cards than cash. This psychological effect is concerning for younger consumers, who may accumulate debt quickly due to the ease of digital transactions.

The rise of buy now, pay later (BNPL) services, such as Klarna and Afterpay, further encourages spending beyond one's means, increasing financial instability.

5. Cybersecurity Threats

A fully digital payment system increases the risk of cybercrimes, including hacking, identity theft, and fraud. As digital payment platforms store sensitive financial data, they become prime targets for cybercriminals.

Phishing scams, data breaches, and unauthorized transactions are all growing concerns in a cashless world.

In 2024, data breaches reached record highs, exposing over 1 billion records and driving up cybersecurity costs. High-profile cyberattacks on companies like Equifax, Capital One, and T-Mobile highlight the vulnerability of digital financial systems.

Without robust cybersecurity measures, individuals and businesses face an increased risk of financial fraud and identity theft.

Who Gains and Who Loses in a Cashless Economy?

Transitioning to a cashless economy brings advantages and risks, creating clear winners and losers. While fintech firms, governments, and urban businesses benefit, vulnerable groups such as the elderly and unbanked populations face significant challenges.

Winners in a Cashless Economy

1. Fintech Companies & Payment Processors: Digital payment firms like PayPal, Venmo, and Apple Pay gain a larger customer base as cash usage declines. Mobile payments are becoming increasingly trusted, with three-quarters of Americans considering them as reliable as cash or cards.

2. Governments & Financial Regulators: Cashless transactions allow for greater transparency, reducing tax evasion and money laundering. Governments can track financial flows more efficiently, making economic policies more data-driven.

3. Tech-Savvy Users & Urban Consumers: Digital payments offer convenience, speed, and security. Younger consumers, particularly in urban areas, prefer cashless transactions due to their efficiency and integration with other services, such as subscription models and e-commerce.

4. Retail & Service Businesses: Businesses benefit from lower cash-handling costs, reduced theft risk, and faster checkout processes. Cashless systems also simplify accounting and tax filing, making operations more efficient.

Losers in a Cashless Economy

1. Elderly & Technologically-Challenged Individuals: Many older adults struggle with digital payment systems and rely on cash for transactions. An entirely cashless economy could exclude them from essential services.

2. Unbanked & Low-Income Populations: Approximately 4% of US households are unbanked, meaning they lack access to banking services. These individuals rely on cash for daily expenses and may face barriers when businesses refuse payments.

3. Rural Communities: Areas with limited internet access or digital infrastructure may struggle with a cashless transition. Small businesses in rural regions might struggle to adopt and maintain cashless systems.

4. Cash-Dependent Workers & Service Providers: Workers in industries that rely on tips, such as restaurant staff, taxi drivers, and street vendors, may affect their earnings if customers move away from cash.

As businesses continue to move toward digital payments, the advantages and risks of going cashless must be carefully considered to ensure financial inclusion for all.

Practical Solutions to Bridge the Cashless Gap

As the future of cashless transactions becomes more specific, steps must be taken to ensure no one is left behind. A well-balanced approach can help address financial inclusion, digital accessibility, and security concerns.

1. Cash Deposit Machines (CDMs)

Cash Deposit Machines (CDMs) allow individuals to deposit physical cash into their digital bank accounts, connecting cash and digital payments. These machines are useful in rural areas where ATMs are available, but traditional banking services are limited.

By enabling cash deposits without requiring in-person visits to a bank, CDMs provide greater financial access, reduce dependency on cash transactions, and support the transition toward a more digital economy.

Unlike standard ATMs, which primarily dispense cash, CDMs allow users to deposit cash at an ATM, making digital banking more accessible to those who still rely on cash for daily transactions.

Many countries have expanded CDM networks to help unbanked populations participate in digital financial systems.

A notable example of CDM implementation is Bank Alfalah, one of the largest private banks in Pakistan. The bank deployed Wavetec's CQuick Cash Deposit Machines to improve operational efficiency and provide self-service options for customers.

With over 200 CDMs installed across Pakistan, the solution helped address challenges such as high cash circulation, limited banking hours, and customer adaptation to digital banking.

These machines allow bulk cash deposits, reduce teller workload, and provide a seamless self-service experience. The initiative enhanced customer convenience while supporting Pakistan's transition toward a more digital financial ecosystem.

By adopting CDMs, banks and financial institutions can offer accessible, efficient, and secure banking solutions, particularly in cash-dependent economies.

2. Digital Literacy Programs

Governments and NGOs help equip vulnerable populations, such as seniors and unbanked individuals, with the knowledge to use digital payment systems.

Training programs that teach people how to use digital wallets, mobile banking apps, and online transactions can make cashless transactions more accessible.

Initiatives like the European Commission's Digital Skills & Jobs Platform and Singapore's Seniors Go Digital program, which focus on improving overall digital literacy, also contribute to digital financial inclusion.

3. Hybrid Payment Models

An entirely cashless economy may not be feasible or inclusive for everyone. Governments and businesses should consider maintaining digital and cash payment options to accommodate all demographics.

For example, despite being among the most cashless, some Scandinavian countries still require essential services like public transport and government offices to accept cash.

4. Offline Digital Payment Options

Innovations in payment technology, such as QR code-based payments that work without an active internet connection, can support financial inclusion in remote areas.

For instance, China's Alipay and India's UPI Lite offer offline payment solutions that ensure transactions can be processed even during network outages.

5. Stronger Data Privacy Regulations

Stricter data protection laws and cybersecurity measures must be in place to build trust in cashless transactions. Governments should implement policies that prevent data misuse, while fintech companies must ensure transparency in handling customer information.

The European Union's General Data Protection Regulation (GDPR) sets a standard for balancing convenience with privacy protection in digital finance.

Conclusion

A cashless society brings undeniable benefits like speed, convenience, and greater financial transparency. The pros and cons of digital payments highlight both opportunities and challenges.

Digital transactions streamline payments, reduce crime linked to physical cash, and create more efficient financial ecosystems.

However, vulnerable groups such as older adults, low-income populations, and those without digital banking access may face exclusion. Financial systems must remain flexible and secure to ensure inclusivity.

Solutions like cash deposit machines, hybrid payment options, and strong privacy regulations can bridge the gap between digital and traditional finance.

Governments and businesses must work together to enhance financial access without eliminating choice. A balanced approach ensures digital payments remain secure, equitable, and accessible for all.

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Explore the pros and cons of a cashless society, from convenience and transparency to financial exclusion and cybersecurity risks.

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A cashless society might sound like something out of science fiction, but it's on its way. Many present-day financial practices and transactions already happen without cash, and many financial institutions, service companies, and even governments are proponents of the shift.

Key Takeaways

What Is a Cashless Society?

A cashless society is one where cash-paper and coin currency-isn't used for financial transactions. Instead, all transactions are electronic, using debit or credit cards or payment services like PayPal, Zelle, Venmo, and Apple Pay. Many countries are moving in this direction, but it's difficult to tell which ones will eliminate cash altogether.

In addition to logistical challenges, several social issues need to be addressed before a society can give up on cash entirely.

The benefits and disadvantages below can give you an idea of the myriad of effects going cashless can have on money and banking as you know it.

Benefits of a Cashless Society

Those with the technological ability to take advantage of a cashless society will likely find that it's more convenient. As long as you have your card or phone, you have instantaneous access to all your cash holdings. Convenience isn't the only benefit. Here are some other benefits.

Lower Crime Rates

Carrying cash makes you an easy target for criminals. Once the money is taken from your wallet and put into a criminal's wallet, it'll be difficult to track that cash or prove that it's yours. One study by American and German researchers found that crime in Missouri dropped by 9.8% as the state replaced cash welfare benefits with Electronic Benefit Transfer (EBT) cards.

Automatic Paper Trails

Similarly, financial crime should also dry up in a cashless society. Illegal transactions, such as illegal gambling or drug operations, typically use cash so that there isn't a record of the transaction and the money is easier to launder. Money laundering becomes much harder if the source of funds is always clearly identifiable. It is harder to hide income and evade taxes when there's a record of every payment you receive.

Cash Management Costs Money

Going cashless isn't just convenient. It costs money to print bills and mint coins. Businesses need to store the money, get more when they run out, deposit cash when they have too much on hand, and in some cases, hire companies to transport cash safely. Banks hire large security teams to protect branches against physical bank robberies. Spending time and resources moving money around and protecting large sums of cash could become a thing of the past in a cashless future.

International Payments Become Much Easier

When you travel, you may need to exchange your dollars for local currency. However, if you're traveling in a country that accepts cashless transactions, you don't need to worry about how much of the local currency you'll need to withdraw. Instead, your mobile device handles everything for you.

Disadvantages of a Cash-Free World

Depending on your perspective, going cashless might be more problematic than beneficial. Here are some of the major downsides associated with a cashless financial system.

Digital Transactions Sacrifice Privacy

Electronic payments aren't as private as cash payments. You might trust the organizations that handle your data, and you might have nothing to hide. However, the more information you have floating around online, the more likely it is to wind up in malicious hands. Cash allows you to spend money and receive funds anonymously.

Cashless Transactions Are Exposed to Hacking Risks

Hackers are the bank robbers and muggers of the electronic world. In a cashless society, you're more exposed to hackers. If you are targeted and somebody drains your account, you may not have any alternative ways to spend money. Even if you're protected under federal law, it will still be inconvenient to restore your financial standing after a breach.

Technology Problems Could Impact Your Access to Funds

Glitches, outages, and innocent mistakes can also cause problems, leaving you unable to buy things when you need to. Likewise, merchants have no way to accept payments when systems malfunction. Even something as simple as a dead phone battery could leave you "penniless," in a sense.

Economic Inequality Could Become Exacerbated

Unless special outreach efforts are made, the poor and unbanked will likely have an even harder time in a cashless society. If smartphone purchases become the standard way to transact, for example, those who can't afford smartphones will be left behind. The UK is experimenting with contactless ways to donate to charities and homeless individuals, but these efforts may not be developed enough yet to substitute cash donations.

Payment Providers Could Charge Fees

If society is forced to choose from just a few payment methods, or if one app becomes the standard payment app, the companies who develop these services might not offer them for free. Payment processors may cash in on the high volumes by imposing fees, which would eliminate the savings that should come from less cash handling.

The Temptation To Overspend May Increase

When you spend with cash, you recognize the financial impact by physically taking the cash out of your pocket and giving it to someone else. With electronic payments, on the other hand, it's easy to swipe, tap, or click without noticing how much you spend. Consumers may have to rethink the ways they manage their spending.

Negative Interest Rates Could Be Passed Onto Customers

When all money is electronic, negative interest rates could have a more direct effect on consumers. Countries like Denmark, Japan, and Switzerland have already experimented with negative interest rates.

Note

According to the International Monetary Fund, negative interest rates reduce bank profitability, and banks could be tempted to hike fees on customers to make up that deficit. Banks are limited in their ability to pass on those costs because customers can simply withdraw their cash from the bank if they don't like the fees. In the future, if customers can't withdraw cash from the bank, they may have to accept any additional fees.

What Does a Cashless Society Look Like?

Without cash, payments happen electronically. Instead of using paper and coins to exchange value, you authorize a transfer of funds from a bank account to another person or business. The logistics are still developing, but there are some hints as to how a cashless society might evolve.

Credit and debit cards: Cards are among the most popular cash alternatives in use today, but cards alone might not be enough to support a 100% cashless society. Mobile devices could become a primary tool for payments instead.

Electronic payment apps: Apps like Zelle, PayPal, and Venmo are helpful for person-to-person payments (P2P payments). In addition, bill-splitting apps allow friends to split their bills easily and fairly. Fintech companies like Stripe, Adyen, and Fiserv support business-to-consumer (B2C), business-to-business (B2B), or what they now merge into account-to-account (A2A) online payments in a reliable and speedy fashion.

Mobile payment services: These services, along with mobile wallets like Apple Pay, provide secure, cash-free payments. Many nations that use cash sparingly have already seen mobile devices become common tools for payments.

Virtual currencies: Cryptocurrency is already part of the discussion. Crypto is used for money transfers, and it introduces competition and innovation that may help keep costs low. However, there are risks and regulatory hurdles that make cryptocurrencies impractical for most consumers, so they might not yet be ready for widespread use.

Examples of Cashless Societies

Several nations are already making moves to eliminate cash, with the push coming from both consumers and government bodies. Sweden and India are two notable examples with two different outcomes.

It's not uncommon to see signs that say, "No Cash Accepted" in Swedish shops. According to the European Payments Council, cash transactions accounted for just 1% of Sweden's GDP in 2019, and cash withdrawals have been steadily declining by about 10% per year. Consumers are mostly happy with this situation, but those who struggle to keep up with technological developments continue to rely on cash.

Sweden is gearing up to become the first cashless nation in the world, with an economy 100% digital by 2023.

The Indian government banned 500 and 1,000 rupee notes in November 2016 in an effort to catch criminals and those working in the informal economy. The implementation was controversial, in part, because these notes made up 86% of currency in circulation. However, criminals weren't punished for hoarding untraceable cash, which had been the intent of the move.

The Economic Times cited the Reserve Bank of India as it reported that electronic transactions had increased temporarily, but cash returned to pre-demonetization levels by the end of 2017.

Note

The Bottom Line

With the many technological and societal moves towards digital and virtual financial transactions, cash currency is becoming less and less common. However, the shift to a fully cashless society has many potential drawbacks, and only time will tell whether cash holds a special niche.

Frequently Asked Questions (FAQs)

What happens to the cash in circulation if a society goes cashless?

Who wants a cashless society?

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A cashless society might sound like something out of science fiction, but it's on its way. Many present-day financial practices and transactions already happen without cash, and many financial institutions, service companies, and even governments are proponents of the shift. A cashless society is one where cash-paper and coin currency-isn't used for financial transactions.

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Does a cashless society benefit everyone?

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As paper money disappears, in countries from Sweden to India, some might get left behind

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July 28, 2016

Thanks to the internet, smartphone apps and other technological advances, we seem to be headed in the direction of a cashless society in which physical currency is replaced completely by an internet connection and a bank account. For instance, I can pay my portion of a bar tab with my phone using the payment-splitting app Venmo. I can send friends money through PayPal's website. I can even buy Cheez-Its at work sans cash, because there's a credit card reader attached to the vending machine. Using near-field communication, the tech-savvy among us can breeze through the retail checkout process by waving an Apple Smartwatch or Visa payWave credit card over a contactless terminal.

All these innovations have happened in the past few decades. At this rate, could cash become completely obsolete in the near future? And is that a good thing?

To answer the first question: Certain cultures are certainly heading in that direction. A 2013 article on Swedish news site The Local was headlined, "Swedes set for cashless future." The article stated that only 27 percent of retail purchases involve cash (not including those made online), and some public buses in the country refuse paper money and coins altogether. Sweden's central bank, the Riksbank, told The Local, "Neither retailers nor banks have any obligation to accept cash."

Convenience-wise, a cashless society certainly sounds appealing (imagine a future with no dirty, wrinkled dollar bills or coins buried in the couch). Privacy-wise, it's harder to say. Especially when you consider the existence of an electronic record of your most sensitive purchases, including items such as drugs.
One example: marijuana
On Oct. 1, 2015, recreational marijuana sales became legal in Oregon. Hundreds of dispensaries sprouted up; they quickly outnumbered Oregon's Starbucks and McDonald's locations. It was a boon for small businesses-except most banks don't allow dispensaries to open accounts. Banks fear losing their Federal Deposit Insurance Corporation insurance, as marijuana is still illegal at the federal level. That means roughly 85 percent of Oregon's dispensaries are cash-only. Many have ATMs inside, but that's not the point. The point is someone at the federal level gets to decide marijuana is questionable even though the majority of Americans disagree.

Immediately, troublesome implications come to mind about the potential difficulties for dispensary owners. What if dispensary owners want to apply for a loan or rent retail space, but have no way to prove their creditworthiness? Paper records only go so far. And it's inconvenient for any business to have to deal solely in cash: Tracking transactions, managing payroll and doing taxes are difficult. As Oregon Sen. Ron Wyden said last year, "It is ridiculous to make any business owner carry duffel bags of cash just to pay their taxes." Finally, there's theft. As Jeffrey Stinson wrote for the Pew Charitable Trusts, "The abundance of cash makes ... dispensaries tantalizing targets for criminals."

These arguments for a cashless society may be compelling, but swapping cash for plastic presents privacy concerns for consumers. Currently, cash-only marijuana purchases mean that my bank-and anyone who hacks into my bank account or subpoenas my banking activity-doesn't know if or when I buy marijuana. If society goes cashless, if I apply for a loan through a national bank, loan officers might not view those purchases favorably when considering how responsible, upstanding and financially prudent I am-even though purchasing marijuana is legal in my state. (Some lenders, such as Earnest, don't merely use your credit score to determine your creditworthiness; they also examine your purchase history.) So yes, marijuana dispensaries should not have to rely solely on cash, but consumers shouldn't have to rely solely on debit and credit cards.

To put it plainly, most people probably don't want their banks to know whenever they buy drugs. The minute Americans can purchase marijuana with credit or debit cards, other people will start making assumptions and judgments will start being used against them.
Your bank account tells all
In an imaginary future cashless society, it's one thing for your bank to know your complete spending history. Unless you shun banks and get paid only in cash, your bank knows almost everything you buy already. But what happens when (as previously mentioned) someone subpoenas a record of your financial transactions to determine whether you deserve custody of your child? Or whether you're a "suspicious character" and had motive to commit a crime? In a cashless society, activities such as gambling, going to a strip club and purchasing a counterfeit handbag lose their anonymity. Not only do banks gain knowledge of your every purchase, but they open the door for others to police your morality.

Sometimes this is a good thing, like with illegal activity. "A student at Columbia University was arrested and charged with five drug-related offenses, including possession with the intent to sell," wrote Sarah Jeong for The Atlantic. "Supposedly, his fellow students and customers had paid him through the PayPal-owned smartphone app Venmo." No matter how unmonitored they seem, most digital apps and payment systems aren't anonymous. That's good news for law enforcement and cases that are black and white, but what about the gray areas?
Who decides what's unethical?
What if the morality of a situation is not as cut-and-dried? Who gets to decide that a legal purchase such as like purchasing marijuana in Oregon or tipping a stripper is unethical? What you and I may think is acceptable may be put in the same category as activities that are illegal and far less ethically ambiguous. For example, a recent initiative by the Department of Justice inadvertently grouped Ponzi schemes and adult entertainment together in the same category of suspicious, high-risk activity, despite their fundamental differences in legality.

Here's the full story, according to Sarah Jeong in The Atlantic: In 2013, the Department of Justice launched an initiative called Operation Choke Point to crack down on high-interest payday loans. The DOJ asked banks to flag "high-risk activity." In addition to guns, get-rich-quick schemes and pyramid schemes, other high-risk activities according to the FDIC included "tobacco sales, telemarketing, pornography, escort services, dating services, online gambling, coin dealers, cable-box descramblers, and 'racist materials,'" wrote Jeong. As a result, banks stopped working with businesses that were actually legitimate, concluded an investigation by the U.S. House Committee on Oversight and Government Reform. As Jeong commented in her piece, "It's strange to see a list of a handful of actually-illegal activities ... alongside legal vices." Indeed. While the goal of Operation Choke Point was to target exploitative payday lenders, not to serve as the morality police, the operation ended up revealing how easy it was to do the latter. In a cashless society, we lose the option to keep legal yet morally questionable purchases private, leaving others to label them as they will.
From hacking to hurricanes
Aside from concerns about privacy and morality, a cashless society is worrisome in light of threats such as fraud and natural disasters (two cases in which cash comes out on top).

Today, it's arguably easier to open a fraudulent credit card in someone's name than to snatch someone's physical wallet; compare 326,000 reported robberies in the United States in 2014 to 333,000 reported cases of identity theft. And having your identity stolen is not merely annoying. "Identity theft is often committed to facilitate other crimes such as credit card fraud, document fraud, or employment fraud, which in turn can affect not only the nation's economy but its security," noted the Congressional Research Service. In contrast, cash is relatively secure, even if you don't wear a wallet chain.

Plus, its liquidity makes it good for emergencies. Apps and online banking require not only power but also internet access. Should a large-scale natural disaster strike, no one will be taking Uber to the grocery store to buy flares with their debit card. Need a five-gallon jug of water? Don't count on Amazon Prime.

Obviously, I'm not advocating draining your bank account and stashing all your money under your mattress. But as we slowly transition away from physical money, it's worth first examining the sacrifices to our privacy, anonymity and security. Jeong warns, "[T]he cashless society offers the government entirely new forms of coercion, surveillance, and censorship." Whether you care more about your freedom or your right to privacy, a cashless society should give us pause.

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Thanks to the internet, smartphone apps and other technological advances, we seem to be headed in the direction of a cashless society in which physical currency is replaced completely by an internet connection and a bank account. For instance, I can pay my portion of a bar tab with my phone using the payment-splitting app Venmo.

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Banknotes, or cash, can be used continuously by any person for nearly every transaction and provide anonymity for the parties. However, as digitization increases, the role and form of money is changing. In response to pressure produced by the increase in new forms of money and the potential for a cashless society, states are exploring potential substitutes to cash. Governments have begun to investigate the intersection of digitization and fiat currency: Central Bank Digital Currencies (“CBDC”).
States have begun researching and developing CBDCs to serve in lieu of cash. Central banks are analyzing the potential for a CBDC that could be made available to the public and serve as a substitute for cash by providing an alternate, safe, and robust payment instrument. However, the greatest attribute of cash is that it protects purchaser anonymity. Fully eliminating cash, without a substitute that safeguards anonymity, would undermine privacy of individuals. The creation of a CBDC in response to the potential cashless society raises the question whether the anonymity previously provided by cash must be safeguarded by the state. This note posits that a central bank in a cashless society must opt for the token-based form of CBDC, which provides the most privacy to individuals. States that choose an account-based CBDC will be in violation of fundamental international privacy principles.
This note begins by drawing the crucial distinction between account-based and token-based currencies. Then, this note argues that the broad right to privacy in the digital age is inclusive of personal financial data; this data is subject to the lawful and arbitrary standards of article 17 of the International Covenant on Civil and Political Rights (“ICCPR”). Applying the ICCPR framework, it becomes abundantly clear that the privacy of individuals must be protected, even in the rapidly changing landscape of payments in the digital age.

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Would a Cashless Society Be a Better Society? | J.P. Morgan

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As physical cash use rapidly declines, what would the implications of a cashless society be? We asked two experts to weigh in on either side of the debate.

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A cashless world is in plain sight. Three steps to make it work

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Connect the increasing consumer demand for new payment preferences with the growing number of merchants seeking a digital-first approach.

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July 28, 2016

Thanks to the internet, smartphone apps and other technological advances, we seem to be headed in the direction of a cashless society in which physical currency is replaced completely by an internet connection and a bank account. For instance, I can pay my portion of a bar tab with my phone using the payment-splitting app Venmo. I can send friends money through PayPal's website. I can even buy Cheez-Its at work sans cash, because there's a credit card reader attached to the vending machine. Using near-field communication, the tech-savvy among us can breeze through the retail checkout process by waving an Apple Smartwatch or Visa payWave credit card over a contactless terminal.

All these innovations have happened in the past few decades. At this rate, could cash become completely obsolete in the near future? And is that a good thing?

To answer the first question: Certain cultures are certainly heading in that direction. A 2013 article on Swedish news site The Local was headlined, "Swedes set for cashless future." The article stated that only 27 percent of retail purchases involve cash (not including those made online), and some public buses in the country refuse paper money and coins altogether. Sweden's central bank, the Riksbank, told The Local, "Neither retailers nor banks have any obligation to accept cash."

Convenience-wise, a cashless society certainly sounds appealing (imagine a future with no dirty, wrinkled dollar bills or coins buried in the couch). Privacy-wise, it's harder to say. Especially when you consider the existence of an electronic record of your most sensitive purchases, including items such as drugs.
One example: marijuana
On Oct. 1, 2015, recreational marijuana sales became legal in Oregon. Hundreds of dispensaries sprouted up; they quickly outnumbered Oregon's Starbucks and McDonald's locations. It was a boon for small businesses-except most banks don't allow dispensaries to open accounts. Banks fear losing their Federal Deposit Insurance Corporation insurance, as marijuana is still illegal at the federal level. That means roughly 85 percent of Oregon's dispensaries are cash-only. Many have ATMs inside, but that's not the point. The point is someone at the federal level gets to decide marijuana is questionable even though the majority of Americans disagree.

Immediately, troublesome implications come to mind about the potential difficulties for dispensary owners. What if dispensary owners want to apply for a loan or rent retail space, but have no way to prove their creditworthiness? Paper records only go so far. And it's inconvenient for any business to have to deal solely in cash: Tracking transactions, managing payroll and doing taxes are difficult. As Oregon Sen. Ron Wyden said last year, "It is ridiculous to make any business owner carry duffel bags of cash just to pay their taxes." Finally, there's theft. As Jeffrey Stinson wrote for the Pew Charitable Trusts, "The abundance of cash makes ... dispensaries tantalizing targets for criminals."

These arguments for a cashless society may be compelling, but swapping cash for plastic presents privacy concerns for consumers. Currently, cash-only marijuana purchases mean that my bank-and anyone who hacks into my bank account or subpoenas my banking activity-doesn't know if or when I buy marijuana. If society goes cashless, if I apply for a loan through a national bank, loan officers might not view those purchases favorably when considering how responsible, upstanding and financially prudent I am-even though purchasing marijuana is legal in my state. (Some lenders, such as Earnest, don't merely use your credit score to determine your creditworthiness; they also examine your purchase history.) So yes, marijuana dispensaries should not have to rely solely on cash, but consumers shouldn't have to rely solely on debit and credit cards.

To put it plainly, most people probably don't want their banks to know whenever they buy drugs. The minute Americans can purchase marijuana with credit or debit cards, other people will start making assumptions and judgments will start being used against them.
Your bank account tells all
In an imaginary future cashless society, it's one thing for your bank to know your complete spending history. Unless you shun banks and get paid only in cash, your bank knows almost everything you buy already. But what happens when (as previously mentioned) someone subpoenas a record of your financial transactions to determine whether you deserve custody of your child? Or whether you're a "suspicious character" and had motive to commit a crime? In a cashless society, activities such as gambling, going to a strip club and purchasing a counterfeit handbag lose their anonymity. Not only do banks gain knowledge of your every purchase, but they open the door for others to police your morality.

Sometimes this is a good thing, like with illegal activity. "A student at Columbia University was arrested and charged with five drug-related offenses, including possession with the intent to sell," wrote Sarah Jeong for The Atlantic. "Supposedly, his fellow students and customers had paid him through the PayPal-owned smartphone app Venmo." No matter how unmonitored they seem, most digital apps and payment systems aren't anonymous. That's good news for law enforcement and cases that are black and white, but what about the gray areas?
Who decides what's unethical?
What if the morality of a situation is not as cut-and-dried? Who gets to decide that a legal purchase such as like purchasing marijuana in Oregon or tipping a stripper is unethical? What you and I may think is acceptable may be put in the same category as activities that are illegal and far less ethically ambiguous. For example, a recent initiative by the Department of Justice inadvertently grouped Ponzi schemes and adult entertainment together in the same category of suspicious, high-risk activity, despite their fundamental differences in legality.

Here's the full story, according to Sarah Jeong in The Atlantic: In 2013, the Department of Justice launched an initiative called Operation Choke Point to crack down on high-interest payday loans. The DOJ asked banks to flag "high-risk activity." In addition to guns, get-rich-quick schemes and pyramid schemes, other high-risk activities according to the FDIC included "tobacco sales, telemarketing, pornography, escort services, dating services, online gambling, coin dealers, cable-box descramblers, and 'racist materials,'" wrote Jeong. As a result, banks stopped working with businesses that were actually legitimate, concluded an investigation by the U.S. House Committee on Oversight and Government Reform. As Jeong commented in her piece, "It's strange to see a list of a handful of actually-illegal activities ... alongside legal vices." Indeed. While the goal of Operation Choke Point was to target exploitative payday lenders, not to serve as the morality police, the operation ended up revealing how easy it was to do the latter. In a cashless society, we lose the option to keep legal yet morally questionable purchases private, leaving others to label them as they will.
From hacking to hurricanes
Aside from concerns about privacy and morality, a cashless society is worrisome in light of threats such as fraud and natural disasters (two cases in which cash comes out on top).

Today, it's arguably easier to open a fraudulent credit card in someone's name than to snatch someone's physical wallet; compare 326,000 reported robberies in the United States in 2014 to 333,000 reported cases of identity theft. And having your identity stolen is not merely annoying. "Identity theft is often committed to facilitate other crimes such as credit card fraud, document fraud, or employment fraud, which in turn can affect not only the nation's economy but its security," noted the Congressional Research Service. In contrast, cash is relatively secure, even if you don't wear a wallet chain.

Plus, its liquidity makes it good for emergencies. Apps and online banking require not only power but also internet access. Should a large-scale natural disaster strike, no one will be taking Uber to the grocery store to buy flares with their debit card. Need a five-gallon jug of water? Don't count on Amazon Prime.

Obviously, I'm not advocating draining your bank account and stashing all your money under your mattress. But as we slowly transition away from physical money, it's worth first examining the sacrifices to our privacy, anonymity and security. Jeong warns, "[T]he cashless society offers the government entirely new forms of coercion, surveillance, and censorship." Whether you care more about your freedom or your right to privacy, a cashless society should give us pause.

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Thanks to the internet, smartphone apps and other technological advances, we seem to be headed in the direction of a cashless society in which physical currency is replaced completely by an internet connection and a bank account. For instance, I can pay my portion of a bar tab with my phone using the payment-splitting app Venmo.

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What is a Central Bank Digital Currency (CBDC)? A CBDC is virtual money backed and issued by a central bank. As cryptocurrencies and stablecoins have become more popular, the world's central banks have realized that they need to provide an alternative-or let the future of money pass them by.
Hover over a country to see their status. Click on a country to learn more.
Key findings

Crossborder CBDC projects

The ABCs of CBDCs
What is a CBDC?
A Central Bank Digital Currency (CBDC) is the digital form of a country's fiat currency that is also a claim on the central bank. Instead of printing money, the central bank issues electronic coins or accounts backed by the full faith and credit of the government.
But don't digital currencies already exist?
There are already thousands of digital currencies, commonly called cryptocurrencies. Bitcoin is the most well-known fully decentralized cryptocurrency. Another type of cryptocurrency are stablecoins, whose value is pegged to an asset or a fiat currency like the dollar. Cryptocurrencies run on distributed-ledger technology, meaning that multiple devices all over the world, not one central hub, are constantly verifying the accuracy of the transaction. But this is different from a central bank issuing a digital currency.
So why would a government get into digital currencies?
There are many reasons to explore digital currencies, and the motivation of different countries for issuing CBDCs depends on their economic situation. Some common motivations are: promoting financial inclusion by providing easy and safer access to money for unbanked and underbanked populations; introducing competition and resilience in the domestic payments market, which might need incentives to provide cheaper and better access to money; increasing efficiency in payments and lowering transaction costs; creating programmable money and improving transparency in money flows; and providing for the seamless and easy flow of monetary and fiscal policy.
What are the challenges?
There are several challenges, and each one needs careful consideration before a country launches a CBDC. Citizens could pull too much money out of banks at once by purchasing CBDCs, triggering a run on banks-affecting their ability to lend and sending a shock to interest rates. This is especially a problem for countries with unstable financial systems. CBDCs also carry operational risks, since they are vulnerable to cyber attacks and need to be made resilient against them. Finally, CBDCs require a complex regulatory framework including privacy, consumer protection, and anti-money laundering standards which need to be made more robust before adopting this technology.
What are the national security implications of a CBDC?
New payments systems create externalities that impact the daily lives of citizens, and can possibly jeopardize the national security objectives of the country. They can, for example, limit the United States' ability to track cross-border flows and enforce sanctions. In the long term, the absence of US leadership and standards setting can have geopolitical consequences, especially if China and other countries maintain their first-mover advantage in the development of CBDCs. Our work on digital currencies at the GeoEconomics Center is at this nexus of the future of money and national security.

Research Team: Ananya Kumar, Alisha Chhangani, Greg Brownstein, and Phillip Meng

Contributions from: Nitya Biyani, Stefan de Villiers, Matt Goodman, Niels Graham, William Howlett, Amy Jeon, Reddy Lee, Roberto Lopez-Irizarry, Abhinav Vishwanath and Varsha Shankar

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Our flagship Central Bank Digital Currency (CBDC) Tracker takes you inside the rapid evolution of money all over the world. The interactive database now features 130 countries- triple the number of countries we first identified as being active in CBDC development in 2020.

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Digital spending is reaching new heights in 2025 - but does this mean going cashless is right for your business?

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The concept of a cashless society has been around for decades. But with 84% of payments in the US being made digitally in 2025 (according to Clearly Payments), the transition from physical currency could take place sooner than we once thought. For businesses adapting to this shift, the best mobile POS systems can help streamline digital transactions and ensure a seamless cash-free experience.

Yet, while the convenience of contactless POS payments remains unmatched, many Americans aren't on board with going fully cashless. This poses a pressing question for businesses: Is 2025 too soon to consider going cash-free?

We've spoken to financial experts to gauge how likely it is that the US will switch to a fully digital economy in the near future. We've also weighed up the benefits and drawbacks associated with going cashless, to help you decide if it's the right move for your business.

Looking for a new POS system? Toast is tech.co's top-rated option for hospitality businesses. It delivers powerful tools to boost restaurant efficiency and profits.

Key Takeaways

A cashless society is coming: Due to the influence of COVID-19 and the growing popularity of digital payment methods like digital wallets, digital payment apps, and cryptocurrency, the US is well on its way to becoming a cashless society.

The US won't be the first cashless society: The US isn't as quick to adopt digital payment methods as the Asia-Pacific region, with countries like South Korea and China currently leading the pack when it comes to cashless living.

Going cashless pays for businesses: There are tons of incentives for businesses to go cashless. For example, ditching physical tender can reduce fraud and theft, increase convenience for buyers and vendors, and boost consumer spending as a result.

Ditching cash isn't without its risks: Going fully digital can make businesses more vulnerable to cybercrime, while also excluding members of the unbanked population from accessing your goods or services.

Investing in the right tech matters: If you're considering taking the plunge, we recommend investing in a POS system that's able to accept a wide range of digital payment methods, before carefully selecting which options will best serve your customer base - be it chip-and-pin, contactless, or even cryptocurrency.

What Is a Cashless Society?

A cashless society is one where neither cash, coins, nor other forms of physical tender are used for financial transactions. Instead, payments are made through digital payment methods like debit cards, credit cards, mobile wallets, and mobile payment apps.

A card reader from SumUp, which takes payments via debit or credit card, mobile, or other forms of digital payment. Source: Tech.co original imagery
Cashless Society Statistics

To present a clearer picture of where society is heading, here are some statistics about cashless societies:

Two-fifths of Americans used no cash in 2022 (Source: Pew Research)

13.4% of American consumers have stopped using cash completely in 2024, compared to 11% in 2022 (Source: Capital One Shopping)

The average number of cash payments fell from 26% in 2019 to 20% in 2021 (Source: Federal Reserve)

Between 2012 and 2022, cheque transactions declined by almost half (Source: Federal Reserve)

The annual growth rate of digital payment is estimated at 9.25%, which could result in digital payments reaching $16.69 trillion by 2028 (Source: Statista)

70% of Americans believe that the US is becoming a cashless society (Source: Card Rates)

More than 23 million people in the UK used virtually no cash in 2021 (Source: The Guardian)

Cash only represents 1.3% of Sweden's GDP (Source: International Monetary Fund)

The number of cashless payments in the Asia-Pacific is forecasted to be higher than Europe and North America combined in 2026 (Source: Statista)

What Are the Benefits of a Cashless Society?

Not convinced of the advantages of going cashless? Here are some reasons dropping cash could benefit businesses and society at large.

Improves convenience

Digital systems can streamline practices by eliminating the need for bank runs and extra POS accessories like cash drawers. Therefore, one of the biggest reasons that businesses decide to go digital is convenience.

Saves costs

While the costs of digital payments can add up - with credit card processing fees averaging between 1.5% to 3.5% per card-based transaction - moving away from manual methods means that businesses will no longer need to cover banking costs associated with depositing and processing cash.

Helps to prevent fraud

Physical cash is much harder to track and trace, hence why it appeals to criminals and fraudsters. Switching to digital payment methods has been shown to reduce money laundering incidents and improve financial transparency in countries like Sweden and China, while also reducing cases of burglary.

Boosts consumer spending

Research shows consumers spend 160% more on credit card transactions than they would on cash transactions, likely because using tap payments and Venmo feels much more abstract. While this isn't ideal for the bank balance of consumers, it can provide valuable opportunities for businesses looking to maintain healthy profits.

What Are the Disadvantages of a Cashless Society?

So, going cashless sounds great, right? Well, while phasing out physical tender can deliver clear benefits to businesses, it's important to be aware of the potential drawbacks of a cashless society, too.

Increases financial exclusion

Around 5.6 million US households are currently unbanked, meaning that the occupants rely on cash to make daily purchases. By making digital methods mandatory, the most marginalized members of society will be affected, including members of the homeless population, who often rely on cash donations from the public in order to get back on their feet again.

Increased risk of cybercrime

While cashless businesses aren't likely to encounter traditional burglaries, digital systems are much more vulnerable to cyber attacks, and these types of crimes tend to cost businesses a lot more.

Lack of privacy

Since digital payments leave a digital trail, the experts that we spoke to raised concerns around data privacy. Cyrus Vanover, founder of personal finance site FrugalBudgeter, told Tech.co: "A cashless society could make it easier for governments and financial institutions to track individuals' financial transactions, raising concerns about privacy and surveillance."

Mandatory negative interest charges

If we ditched cash for good, normal citizens wouldn't be able to avoid paying negative interest rates imposed by central banks to curb the impact of inflation. Examples of this have already been seen in Japan, when the national bank introduced a policy that charged its users a negative interest rate of 0.1% back in 2016.

"Cashless payments can be a barrier for people who do not have access to technology or who are not familiar with digital payment systems." - Doug Carey, a chartered financial analyst and CEO of WealthTrace

In the table below, you'll find a quick at-a-glance overview of the pros and cons of a cashless society.

Cashless society

More convenient

Saves costs

Helps to prevent fraud

Boosts consumer spending

Increases financial exclusion

Increased risk of cybercrime

Lack of privacy

Mandatory negative interest charges

When Will Society Become Cashless?

While it's impossible to accurately predict when the US will move to a fully cashless society, a 2024 survey by Card Rates reveals that 70% of Americans believe that the nation is becoming a cashless society, with two in five respondents never usually carrying cash.

"Today you can actually conduct all aspects of your life without ever spending a single dollar bill."- Mario Almonte, Managing Partner at Almonte PR

The popularity of cash payments has been dwindling for some time, but the method took a massive hit during the first year of the pandemic. In this period, cash comprised just 19% of all transactions, representing a fall of 7%. The trend toward digital currency has accelerated ever since, with the number of card and phone payments climbing higher each year.

Due to the accessibility of digital payment options, Mario Almonte, managing partner of the financial PR company Herman & Almonte, explains that for many US citizens, a cashless society is already here. "Every vendor offers cashless payment options," Almonte tells Tech.co, adding: "Today you can actually conduct all aspects of your life without ever spending a single dollar bill."

But the phasing out of paper and coins isn't just taking place on home soil. While no such countries currently exist, experts predict that Sweden could become fully cashless by the end of 2025.

Recent technological developments like the growing sophistication of digital wallets and the rise of blockchain-based systems like Bitcoin and central bank digital currencies (CBDCs) are accelerating the move away from physical tender, too.

But despite this global shift away from physical currency, the US isn't likely to officially transition anytime soon. The government has no plans to make paper money worthless, and the majority of Americans are not ready to make cash a thing of the past - 56% of Gallup respondents revealed that they like to have cash with them at all times when they leave the house.

Which political party wants a cashless society?

While the debate around going cashless isn't neatly split down partisan lines, Republicans have traditionally proven more favorable towards the idea of a cashless society.

On the other side of the coin, Democrats tend to be more supportive of protecting cash. With around 7% of the US population unbanked, they argue that the acceleration of cashless payments could leave certain segments of the population behind.

On occasion, both sides see eye to eye. Several US states, including Arizona, Illinois, New York, and Kentucky, have banned retail establishments from going fully cashless after the bills received cross-party support from legislators.

Steps Businesses Should Take Today

Going cashless won't be right for every business. Here are some important considerations to make if you're curious about ditching dollar bills for good.

Know your customer base

If you make a large portion of your income through cash payments or primarily serve demographics who still consider cash to be king - such as elderly consumers and those from lower socio-economic backgrounds - removing cash may cut off vital streams of revenue.

Check if your state is eligible

While most states don't have any policies against going fully digital, certain states and cities prohibit cashless businesses. These states include Connecticut, New Jersey, Massachusetts, and Pennsylvania, making ditching cash in these locations impossible.

Invest in a good POS system

However, if you're looking to streamline your checkout experience and tap into the ever-growing digital payments economy, embracing tech for cashless payments could prove to be a wise decision for your business.

For those serious about taking the next steps, POS systems offer streamlined ways for businesses to accept and manage digital transactions. Most POS systems let you accept a wide range of digital payment options, such as e-wallet, bank transfer, and contactless (including Apple Pay and Google Pay). Our top-rated provider, Square , even offers Buy Now Pay Later (BNPL) and split-payment options.

Summary: Are We Close to a Cashless Society?

In summary, while a cashless society offers a raft of great benefits, including a reduction in fraud, better convenience, and more, it doesn't look like the US will go fully cashless in the near-future. This is because it still has its drawbacks, from potentially increasing financial exclusion to raising the possibility of cybercrime.

What we can say conclusively is that US society is slowly moving towards a future in which cash plays a very minor role, even if it is never totally cashless. And in this climate, it's critical that your business is ready to cope with the demands of a largely digital economy.

Use our free comparison tool to get tailored quotes for your next POS system.

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Written by:

Isobel O'Sullivan (BSc) is a senior writer at Tech.co with over four years of experience covering business and technology news. Since studying Digital Anthropology at University College London (UCL), she's been a regular contributor to Market Finance's blog and has also worked as a freelance tech researcher. Isobel's always up to date with the topics in employment and data security and has a specialist focus on POS and VoIP systems.

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How Close Are We to a Cashless Society? 2025 Guide

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US society is on course for a cashless society, but how far into the future will it happen? Check out our full guide, with pros, cons, stats, and more.

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Learn the pros and cons of a nation going cashless—and how you can help influence monetary policy with a PhD in Public Policy and Administration.

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For the 2.5 billion adults who transact exclusively in cash due to lack of effective access to formal financial services, having digital access to financial services may be transformational. The benefits of digital financial inclusion for the financially excluded and underserved are the following, among others:

access to formal financial services - payments, transfers, savings, credit, insurance, securities, etc. Migration to account-based services typically expands over time as customers gain familiarity with - and trust in - a digital transactional platform. Government-to-person payments, such as conditional cash transfers, that can enable digital stored-value accounts may provide a path for the financially excluded into the financial system

typically lower costs of digital transactional platforms - both to the provider and thereby the customer - allow customers to transact locally in irregular, tiny amounts, helping them to manage their characteristically uneven income and expenses

additional financial services tailored to customers' needs and financial circumstances are made possible by the payment, transfer, and value storage services embedded in the digital transaction platform itself, and the data generated within it

reduced risks of loss, theft, and other financial crimes posed by cash-based transactions, as well as the reduced costs associated with transacting in cash and using informal providers

it can also promote economic empowerment by enabling asset accumulation and, for women in particular, increasing their economic participation

Digital financial inclusion also carries risks for the same vulnerable financially excluded and underserved customers that benefit from the opportunities, mainly:

novelty risks for customers due to their lack of familiarity with the products, services, and providers and their resulting vulnerability to exploitation and abuse.

agent-related risks due to the new providers offering services are not subject to the consumer protection provisions that apply to banks and other traditional financial institutions

digital technology-related risks can cause disrupted service and loss of data, including payment instructions (for example, due to dropped messages), as well as the risk of a privacy or security breach resulting from digital transmittal and storage of data

Customer uptake of digital financial services in many markets suggests that on balance these risks may not be perceived to outweigh the benefits of being financially included. Nonetheless, the case is strong for appropriate regulation and supervision.

The key regulatory issues raised by digital financial inclusion relate to agents, anti-money laundering and countering financing of terrorism (AML/CFT) rules, regulation of e-money, consumer protection, payment system regulation, and competition. Many of these issues fall within multiple regulators' competencies, requiring effective communication and collaboration among them.

The models of digital financial inclusion emerging in countries around the world introduce new market participants and allocate roles and risks (both new and well known) differently from the traditional approaches to retail financial service delivery. Some risks are common to most or all approaches to digital financial inclusion. The engagement of mobile network operators (MNOs), whether as e-money issuers or as a channel for a bank or similar provider, presents certain potential risks that differ from approaches without MNOs. Some risks are triggered by the model of the digital transactional platform in question. Finally, some risks relate to the provision of additional financial services beyond the payments, transfers, and value storage services offered by the digital transactional platform itself.

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For the 2.5 billion adults who transact exclusively in cash due to lack of effective access to formal financial services, having digital access to financial services may be transformational. The benefits of digital financial inclusion for the financially excluded and underserved are the following, among others: access to formal financial services - payments, transfers, savings, credit, insurance, securities, etc.

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The Risks of a Cashless Society and Its Impact on America – MIRA Safety

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Explore the hidden dangers of a cashless society, from digital payment risks to the impact on personal preparedness. Learn how to navigate this evolving landscape.

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Learn the pros and cons of a nation going cashless—and how you can help influence monetary policy with a PhD in Public Policy and Administration.

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Financial Vulnerability, Financial Literacy, and the Use of Digital Payment Technologies - Journal of Consumer Policy

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The purpose of this study is to test the notion that the use of digital payment methods, such as paying with a mobile phone, increases the risk of financial vulnerability. Research from the USA indicates such a relationship, and we study whether this finding can be generalized to other countries. Motivated by recent changes in EU legislation related to financial transactions, we also examine willingness to use social media companies for money transfers along with sharing bank account information with third-party financial services. Exploiting data collected from a representative sample of the Norwegian adult population (n = 2202), we identify differences in financial behaviour and characteristics between users and nonusers of different digital payment methods. In contrast to US studies, we find that mobile payment users were less financially vulnerable than nonusers and those women were more likely users of digital payment technologies than men. Younger generations and those with low financial literacy were more financially vulnerable than others, although we did not find this to be related to the use of mobile payment or other digital payment methods. The results show that there is a need for more research from different countries outside of the USA to obtain an understanding of the consequences of increased digitalization of financial services. In addition, as COVID-19 has shifted a vast amount of spending online and these newer payment technologies have become more available, we need to gain a better understanding of how they influence financial behaviour.

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By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:

Section 1. Purpose. The continued use of paper-based payments by the Federal Government, including checks and money orders, flowing into and out of the United States General Fund, which might be thought of as America's bank account, imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies. Mail theft complaints have increased substantially since the COVID-19 pandemic. Historically, Department of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer (EFT). Maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer over $657 million in Fiscal Year 2024 alone.

This order promotes operational efficiency by mandating the transition to electronic payments for all Federal disbursements and receipts by digitizing payments to the extent permissible under applicable law (but not, for avoidance of doubt, to establish a Central Bank Digital Currency).

Sec. 2. Policy. It is the policy of the United States to defend against financial fraud and improper payments, increase efficiency, reduce costs, and enhance the security of Federal payments.

Sec. 3. Phase Out of Paper Check Disbursements and Receipts. (a) Effective September 30, 2025, and to the extent permitted by law, the Secretary of the Treasury shall cease issuing paper checks for all Federal disbursements inclusive of intragovernmental payments, benefits payments, vendor payments, and tax refunds, except as specified in section 4 of this order.

(b) All executive departments and agencies (agencies) shall comply with this directive by transitioning to EFT methods, including direct deposit, prepaid card accounts, and other digital payment options, and take all steps necessary to enroll recipients in EFT payments, except as specified in section 4 of this order.

(c) As soon as practicable, and to the extent permitted by law, all payments made to the Federal Government shall be processed electronically, except as specified in section 4 of this order.

(d) The Secretary of State, the Secretary of the Treasury, the Secretary of Health and Human Services, the Secretary of Education, the Secretary of Veterans Affairs, and the Secretary of Homeland Security shall take appropriate action to eliminate the need for the Department of the Treasury's physical lockbox services and expedite requirements to receive the payment of Federal receipts, including fees, fines, loans, and taxes, through electronic means except as specified in section 4 of this order.

(e) The Secretary of the Treasury shall support agencies' transition to digital payment methods, including by providing access through the Department of the Treasury's centralized payment systems to:

(i) direct deposits;

(ii) debit and credit card payments;

(iii) digital wallets and real-time payment systems; and

(i) individuals who do not have access to banking services or electronic payment systems;

(ii) certain emergency payments where electronic disbursement would cause undue hardship, as contemplated in 31 C.F.R. Part 208;

(iii) national security- or law enforcement-related activities where non-EFT transactions are necessary or desirable; and

(iv) other circumstances as determined by the Secretary of the Treasury, as reflected in regulations or other guidance.

(b) Agencies shall coordinate with the Department of the Treasury to facilitate a smooth transition to digital payments, ensuring that affected individuals and entities receive adequate support.

(c) The Secretary of the Treasury shall work with financial institutions, consumer groups, and other stakeholders to address financial access for unbanked and underbanked populations.

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

DONALD J. TRUMP

THE WHITE HOUSE,
March 25, 2025.

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Modernizing Payments To and From America's Bank Account

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By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:Section 1. Purpose.

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t had taken so much for Tina to get to the supermarket; to go home empty-handed left her in tears. Tina, 47, has conditions including chronic fatigue syndrome, fibromyalgia, post-traumatic stress disorder, anxiety and depression. She should not have been out at all, but, although her doctor had told her to shield indoors, she had not been put on the government's high-risk list, meaning she has to do her food shopping herself.

Tina had taken the bus from her home in Kent to her local supermarket. She had queued up outside, which is tough when you are on crutches - standing up for any period of time is fatiguing. When she got into the supermarket, she hustled around as quickly as she could and was relieved to find they had almost everything she needed. At the till, the checkout assistant scanned Tina's items. She got out her cash. The checkout operator waved it away. "You can't pay cash in here," she told Tina. "It's against the law."

Tina knew that could not be true. "I said: 'It's not the law,'" Tina remembers. "'You can only refuse a note if it's a forgery. It's the Queen's legal tender!'" But the checkout operator insisted - it was a card payment or nothing. Tina told her that she could not pay by card because she did not have enough money in her account to cover the shopping. The checkout operator would not budge. "I got the bus home in tears."

Tina is one of the many people who have struggled to purchase necessities during the coronavirus pandemic, as retailers increasingly refuse to take cash. A recent study of more than 2,000 people by the consumer group Which? found that one in 10 people were refused by shops when trying to purchase essential items with cash during the pandemic. Which? has long been calling on the government to protect cash as a payment option, with some success: the chancellor of the exchequer, Rishi Sunak, pledged to protect access to cash in his 11 March budget.

But that was before coronavirus hit and retailers moved to ban cash transactions because of concerns that coins and notes may spread Covid-19. (Contrary to reports, the World Health Organization never instructed consumers to avoid cash during the pandemic.) Within days of shops starting to close, UK cash usage halved. Signs reading "contactless payment only" became common at tills and petrol stations. "What covid did was push anyone who could go digital to go digital," says Natalie Ceeney of the Access to Cash Review, an independent body assessing the future of Britain's cash needs. The UK has been moving towards a cashless economy for some time, with ATM usage declining at about 6% to 10% a year. But Covid-19 supercharged this transition. "During lockdown, cash withdrawals from ATMs were down about 60%," she says. "That's a huge drop."

If you have ever seen a queue outside banks or post offices to pay bills in cash, you may have seen people like Tina. As is the case for many people on benefits, low incomes or without access to online banking, Tina usually withdraws her personal independence payment and her employment and support allowance in cash. She then tops up her gas and electric at the bank, where she also pays her council tax, and puts the rest aside for food.

As the economy switched to contactless in a matter of days, many people were left behind. Illustration: Gym Class/The Guardian

Those of us who use contactless payment technology routinely scarcely noticed the coronavirus-induced switch to a virtually cashless economy, apart from the limit being increased to £45. But for the approximately 1.2 million people living in the UK who are unbanked - meaning they don't have access to any bank account - buying essentials became a herculean undertaking. "People without legal immigration status in the UK are not legally allowed to open a bank account," says James Tullett of the migrant and refugee charity Ramfel. When shops refuse to take cash from these people, they leave them vulnerable to bad actors, Tullett adds. "They are likely to use informal services, which are more open to being exploited."

It is not only unbanked people who will have struggled during the pandemic. People with bank accounts prefer to use cash for a variety of practical and personal reasons. "Those who rely on cash are the most vulnerable people in our society," says Ceeney. "They may live in a rural area where they can't get the decent broadband or mobile signal they need for online banking. Or they may be older or on low incomes."

Domestic abuse survivors often squirrel away emergency cash - the odd fiver here and there is easy to hide. "Access to cash is really important," says Nicola Sharp of the charity Surviving Economic Abuse, "both in terms of their ability to flee and their safety after fleeing." She explains that many abusers monitor bank transactions, leaving survivors reliant on cash. "Measures to go cashless create a context in which it is more difficult for survivors to access the cash they need," Sharp says.

It is a cruel irony that the people most reliant on cash during the pandemic - older people, who often need cash to reimburse neighbours for shopping - were the people most likely to struggle to access it. About 2.3 million people aged 70 or above don't have an internet connection at home. Bank and ATM closures in rural areas - at least 3,303 have closed in the past five years - disproportionately affect older people.

Age UK received a surge of phone calls in the third week of lockdown, as older people with diminishing reserves worried about how they would reimburse neighbours and relatives for their food shopping. In response, Barclays, NatWest and Tesco Bank started sending out cash through the post. But some older people were left with no choice but to hand over their bank cards to strangers and trust them to do the right thing.

"I will not do banking on the iPad at all," says Audrey, an 87-year-old retiree from Bedfordshire. "I just refuse to do it." Normally, this poses no problem: it is a 15-minute walk from Audrey's house to her local building society. But during coronavirus, Audrey - who has lived alone since her husband died eight years ago - has relied on her son to withdraw cash for her, which she gives to her neighbours for food shopping. "I put the cash in an envelope and leave it on the doorstep," says Audrey. But she worries about older people without family to help out. "What if you don't have a family?" she asks. "How do you get cash then?"

Audrey Purr ... 'I will not do banking on the iPad at all.' Photograph: David Levene/The Guardian

Consumers and retailers favour contactless payments for hygiene reasons: there is no need for customers to handle chip-and-pin machines. "Covid has been a massive win for the digital payments industry, and the digital world more generally, as people retreat from the physical," says Brett Scott, author of The Heretic's Guide to Global Finance.

But, as the economy switched to contactless in a matter of days, many people were left behind. Jaki Whyte, 38, from Colchester, has only a chip-and-pin debit card. This proved difficult during the pandemic, as Whyte - who is disabled and on the shielding list - relies on care workers to pick up supplies. On three occasions, White's care workers were refused at her local pharmacy because her card was not contactless. (She is not registered for online banking because she can't afford the data on her phone and, until the banks reopen, she is not able to request a contactless payment card.) "It took nearly two and a half months to get what I needed," Whyte says, "and only because a family member got a lift into town to help me out."

When Whyte ventures back into the world, she will probably find it more difficult than ever to purchase necessities. "When we emerge from covid," says Ceeney, "our cash infrastructure will be even more unviable, and it's likely we'll see more bank closures. Shops need to deposit cash. If they don't have a local bank branch where they can do that, it makes taking cash really difficult. That's why more retailers are going to go cashless."

Every time banks close branches or cut ATMs, they're preventing you from exiting their system

Brett Scott

Some would argue that a cashless society is the future; who are we to resist it? Surely people such as Audrey should receive digital literacy training and those who refuse should be corralled through the removal of ATMs, bank closures and card-only tills until the narrowing and more desperate cadre of digital refuseniks is finally obliterated. But there are ideological reasons to resist going cashless. "The war on cash is a bigger issue than people realise," says Scott.

The private banking sector, and payment companies such as Visa and Mastercard, want us to stop using cash. "These guys have been battling against cash," Scott says. "They view cash as a cost." (By contrast, state-run banks generally try to preserve access to cash.) When we move towards a cashless society, Scott explains, we are locked into the private banking system. "Imagine you go to a casino and you have cash with you - state money," Scott says. "The casino gives you chips, which you can cash out when you leave. A similar thing goes on in the private banking sector. Every time they close branches or cut ATMs, they're preventing you from exiting their system. Our ability to exit the banking sector is the single greatest thing that holds banks in check," Scott says.

The slide towards a cashless economy also raises privacy concerns. "With digital systems, there are huge amounts of data," Scott says. "When you can see what people are buying, you can start to block payments, chaperone payments, mess with payments ... financial data is one of the most sensitive forms of data around." Moving to a digital-first system benefits the major players, something Audrey understands intuitively. "It's all right for the big boys, for the banks," Audrey says. "It makes their lives easy for them: no cash! But I don't think for the small traders it will do them any good." Retailers usually pay fees on contactless payments. She worries about how service industry workers will fare. "Suppose you go on a coach outing," Audrey says. "Normally you put 50p into a whip-round for the guide. How would you do a whip-round if you haven't got any cash?"

There are ideological reasons to resist going cashless. Illustration: Gym Class

This Covid-19-accelerated move to a cashless economy will hurt the most vulnerable in our society the most. "Cash dependence mirrors classic vulnerabilities in terms of income, disability and race," says Ceeney. People who earn less than £10,000 are 14 times more likely to be dependent on cash than those who earn more than £30,000 a year. "The reason for this is primarily budgeting," Ceeney explains. "If you're a gig economy worker, direct debits can be dangerous. If you have a fixed amount of money in cash, you can budget for exactly what you have." Contactless payments, which can often take a few days to come out of accounts, can skew a precarious financial balance.

This is the reason Whyte prefers to use cash. "I can see in my hands how much, physically, I've got," she explains. "I can't budget when it's not cash - I don't know where I've spent my money. I can't do mental maths like that." Cash is either there or it is not - Tina also does not have to worry about a direct debit looming out of the digital ether and destabilising her finances. "I know what it's like to go without food, gas or electric," she says. "With cash, I know exactly how much is in my purse."

For Tina, having to switch to digital payments during the pandemic has been stressful. She recently got out of debt with the help of the charity Christians Against Poverty. Having to set up card payments during the pandemic - she could not pay for her gas or electricity at the bank - caused her mental health to deteriorate. Her daughter helped, but still Tina worries. "What if I've done something wrong and the bill hasn't been paid?" Tina says. "It's made my anxiety worse."

What are the long-term implications of starving a nation of its access to cash? More anxiety for Tina. Increased exploitation of unbanked people. Fewer options for women fleeing abusive relationships. People who beg and charities that rely on cash donations disadvantaged. A public locked into a private banking system from which we have no escape and increasingly less autonomy. "If we go to a cashless society, I won't be able to cope," Tina says.

"Cash is really the bicycle of payments," says Scott. "It preceded the car and is still popular today. We need to have a multimodal form of payment systems ... cash and card working together, just as bicycles and car lanes go together." Because, although cash may be a pain to carry around sometimes, it is actually pretty useful.
Some surnames ha ve been omitted to protect identities

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'You can't pay cash here': how our newly cashless society harms the most vulnerable

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t had taken so much for Tina to get to the supermarket; to go home empty-handed left her in tears. Tina, 47, has conditions including chronic fatigue syndrome, fibromyalgia, post-traumatic stress disorder, anxiety and depression.

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CASHLESS SOCIETY - AN ANALYSIS OF THE THREAT OF CRIME AND THE INVASION OF PRIVACY | Office of Justice Programs

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Reducing transaction costs, closing the financial inclusion gap, and fighting corruption are just a few.

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Volumatic US | Money Counting Machines | Cash Handling

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Future of Cash | Dispelling the myth of a cashless society

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While cash use has declined over the last decade, with the introduction of more sophisticated mobile and digital payment methods, cash is still very much alive and well!

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The impact of a cashless society on financial crime | Napier AI

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In an era marked by the proliferation of cashless societies, the financial crime landscape is undergoing a profound transformation. By Richard Quick - Oct 12, 2023

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Learn the pros and cons of a nation going cashless—and how you can help influence monetary policy with a PhD in Public Policy and Administration.

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click on PDF

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DPS 2.0: on the road to a cashless society

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While cash will eventually become a thing of the past, marketing researchers have given little attention to the rise of cashless markets and the obstacles and opportunities they present. In fact, research that addresses the strategic approach to…

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View of Transforming Student Lifestyles through Digital Payment: A Socio-Economic Perspective

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Cash will soon be obsolete. Will America be ready? | Brookings

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Eswar Prasad examines the economic, financial, and societal effects of the end of cash.

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Navigating the Transition: Impacts, Challenges and Future Prospects of a Cashless Society | OxJournal

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The global shift towards a cashless society represents a significant transformation in the way economies operate, driven by advancements in digital technology and the increasing preference for electronic transactions. This paper explores the implications, challenges, and future prospects of transitioning to a cashless society, by drawing on case studies from various countries at different stages of this transition. The study examines the potential benefits of a cashless society, including increased financial inclusion, reduced transaction costs, and enhanced transparency. However, we also address critical challenges, such as digital security risks, the advancements of the technological industry, and the persistence of cash in certain cultures and economies. Through a comprehensive analysis of these factors, the paper provides insights into the socioeconomic impacts of a cashless transition and offers a clear understanding of what lies ahead for the many countries embarking on this evolutionary change. While doing this, we will also highlight that although the move towards a digital economy holds significant promise, it requires careful planning, robust infrastructure, and adaptive strategies to eliminate risks and ensure that this journey is smooth and successful.

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In this chapter, I would like to describe my views on the development of a cashless society. We will first examine statistics related to cashless payments. When calculated to include bank transfers/account transfers, the cashless payment ratio reaches as high as 92%…

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Navigating the Transition: Impacts, Challenges and Future Prospects of a Cashless Society | OxJournal

# data[].attributes.attachment_link.description
The global shift towards a cashless society represents a significant transformation in the way economies operate, driven by advancements in digital technology and the increasing preference for electronic transactions. This paper explores the implications, challenges, and future prospects of transitioning to a cashless society, by drawing on case studies from various countries at different stages of this transition. The study examines the potential benefits of a cashless society, including increased financial inclusion, reduced transaction costs, and enhanced transparency. However, we also address critical challenges, such as digital security risks, the advancements of the technological industry, and the persistence of cash in certain cultures and economies. Through a comprehensive analysis of these factors, the paper provides insights into the socioeconomic impacts of a cashless transition and offers a clear understanding of what lies ahead for the many countries embarking on this evolutionary change. While doing this, we will also highlight that although the move towards a digital economy holds significant promise, it requires careful planning, robust infrastructure, and adaptive strategies to eliminate risks and ensure that this journey is smooth and successful.

# data[].attributes.attachment_link.title
Navigating the Transition: Impacts, Challenges and Future Prospects of a Cashless Society | OxJournal

# data[].attributes.attachment_link.description
The global shift towards a cashless society represents a significant transformation in the way economies operate, driven by advancements in digital technology and the increasing preference for electronic transactions. This paper explores the implications, challenges, and future prospects of transitioning to a cashless society, by drawing on case studies from various countries at different stages of this transition. The study examines the potential benefits of a cashless society, including increased financial inclusion, reduced transaction costs, and enhanced transparency. However, we also address critical challenges, such as digital security risks, the advancements of the technological industry, and the persistence of cash in certain cultures and economies. Through a comprehensive analysis of these factors, the paper provides insights into the socioeconomic impacts of a cashless transition and offers a clear understanding of what lies ahead for the many countries embarking on this evolutionary change. While doing this, we will also highlight that although the move towards a digital economy holds significant promise, it requires careful planning, robust infrastructure, and adaptive strategies to eliminate risks and ensure that this journey is smooth and successful.

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MANCHESTER, UNITED KINGDOM - JANUARY 29: An armed response officer from Greater Manchester Police poses with a Heckler and Koch G36 assualt rifle during the first ever Vanguard Conference, a joint Greater Manchester Police and security industry venture to reduce the number and severity of commercial and cash-in-transit robberies on January 29, 2008 in Manchester, England. (Photo by Christopher Furlong/Getty Images)

Getty Images

Do you think that getting rid of cash will reduce crime or increase it? We can look at Scandinavia for indicators, since there are a great many people in Scandinavia who cannot remember when they last used cash. Cash-related crimes such as bank robbery are down (twenty years ago Denmark had 200 bank robberies per annum, last year it had none) as is tax evasion. The Swedish black market appears to have contracted, just as cashless campaigner Bjorn (from ABBA) and others had hoped.

Cash And Crime

The presence of cash means the presence of criminals and many of them are violent. Not only guns, but all sorts of weapons. This guy didn't drive smash his car through the doors of a grocery store in England this week, then threaten staff and demand credit card receipts. He demanded cash.

(It's not a purely English problem. There were nearly 900 robberies using a vehicle as a weapon in the US in 2022.)

While cash attracts crime, the end of cash of course does not mean the end of crime. But it does mean that we have to do proper risk analysis on its replacements, whether these are going to be electronic money (e.g., instant payments in the UK, where authorized push payment fraud is out of control and is already more than card fraud), electronic cash (in the form of public or private digital currency) or cryptocurrency. In largely cashless Sweden, online crime has surged, with criminals taking more than $100 in 2023 through a variety of scams.

Does cashlessness make Sweden a "high crime" country as the article implies? I would think that Swedish citizens are more concerned about violent gang warfare and a tripling of the murder rate, but for comparison according to UK Finance the equivalent scams in the UK were well over $1 billion back in 2022.

The link between cash and crime is significant. The Asian Development Bank that found that more fintech reduces thefts by reducing cash holdings (and, rather interestingly, providing more job opportunities). What's more, a survey to estimate the cost of theft for households suggested a further unexpected source of welfare gainfrom the development of fintech: an improvement in public security. American Banker says that violent bank crime has become increasingly less common but there were still 1,612 bank robberies in the US in 2022 whereas in Sweden there were... none.

(Not all bank robberies involve shotguns, by the way. There was a robbery in London recently where the robber posed as a security guard, wandered into a branch of Santander, flashed a fake ID and walked out with two boxes of cash with a total of £150,000 in them!)

Interestingly, talking about ID, one of the problems in Sweden is the prevalence of BankID. Almost everyone in Sweden uses their "BankID" for everything. Over the last couple of decades it has become integral to Swedish life, used more than twice a day by every adult Swede for everything from filing tax returns to buying bus tickets. Signicat's excellent report "The State of Digital Identity in the Nordics 2024" notes that this has led to problems with social engineering attacks that fooled consumers into accepting "rogue authentication request" in the BankID app, but the recently launched digital ID card in the app should help. It is activated by reading a Swedish passport or national ID card and works by presenting a dynamic QR code that can be scanned to digitally verify identity and create a digital transaction record, it is designed to cope with these attacks, creating a link between the service and the app.

More And Less

The conclusion I draw from all of this is, as you might expect from someone with a lifetime in consultancy, nuanced. Yes, of course the presence of cash induces crime and so the absence of cash reduces crime, or at least it reduces some kinds of crime. The reverse is also true: if there is more cash floating about then there will be more crime, particularly opportunistic crime. This is why people who are trapped in a cash economy are so vulnerable to theft, loss and shakedowns and why the idea that we need to keep cash in order to support less well-off members of society is misplaced. UK research indicates that families who are trapped in the cash economy are hundreds of pounds per annum worse off than families who are not. The reasons are multiple: the cost of cash acquisition, the inability to pay utilities through direct debit, exclusion from online deals and a variety of losses.

(There's something unfair about this. People who choose to exist in a cash economy to avoid taxes, such as drug dealers, are cross-subsidized by the rest of us whereas people who have no choice but to exist in a cash economy are not cross-subsidized at all.)

However, if we reduce cash in the absence of any kind of overall strategy towards cash and cashlessness (which would necessarily include some form of digital identity infrastructure) then organized crime will simply move from the physical to the virtual and begin looting bank accounts instead of cash registers. Coming from a technological direction, I am optimistic that we can reduce both cash and crime by taking a more strategic approach to the issues of identification, authorization and authentication in an always-on, always-connected society.

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Does Reducing Cash Mean More Or Less Crime In Society?

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If we reduce cash in the absence of any kind of overall strategy towards cashlessness then organized crime will simply move from the physical to the virtual.

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Is the U.S. Ready for a Cashless Society?

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As digital wallets and contactless payments become more popular, cash is becoming less common in everyday transactions. Younger consumers, especially,

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America’s Cashless Society - The Problem of Crime in the Electronic Society | Office of Justice Programs

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The effect of cashless payments on the internet and mobile banking

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Some of the problems of cash transactions were the inconvenience of handling cash and the limited availability of banking services to facilitate cash withdrawals. The purpose of this paper is to examine the impact of cashless payments on the usage…

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A cashless society isn't one in which cash is illegal, it's one in which cash is irrelevant.

Helen Holmes (Instagram @TheOfficeMuse)

As I wrote recently, China is well on the way to becoming a cashless society. It is not the only country heading in that direction, of course. Sweden is almost there and the UK is heading that way too. In fact, a cursory examination of the global statistics around the declining use of banknotes and coins makes it easy to predict that many countries will soon be effectively cashless within the strategic horizon of corporate planners. But what does this actually mean? USA Today just asked what sounded like a pretty dumb question: will there be cash in a cashless society? Well, I don't think it's a dumb question. And the answer is "yes". When I talk about a cashless society within a generation, I do not mean that there will be literally no cash at all. That would be stupid.

Cash will still be around and it will still be legal tender (although I don't think people understand what a limited concept this is), but it will disappear from polite society and from the daily lives of most people. We will move from being a debit card society to a mobile society to a biometric society. Cash will still exist. It just won't matter.

As the brilliant William Gibson wrote in his 1995 classic novel Count Zero, talking about a character adrift in the near future that "he had his cash money, but you couldn't pay for food with that" before going on to deliver my favourite line about cash in the whole of modern fiction..

"It wasn't actually illegal to have [cash], it was just that nobody ever did anything legitimate with it".

This is a plausible vision of the not-too-distant future. The futurist Ross Dawson wrote a great piece about Gibson, pointing out that he has never claimed to predict the future but has "an unmatched knack for analyzing trends and behaviours inherent to modern life and extrapolating them into vivid themes that reveal a kind of raw truth about humanity". I agree. He has an amazing track record on this. As the New Yorker highlights, Gibson first used the word "cyberspace" in 1981. His books had a huge impact on me and my way of thinking about technology.

Thus by cashless, I mean cashless in the Count Zero sense. I mean that cash has ceased to be relevant to monetary policy, become irrelevant to most individuals and vanished from most businesses. As we look to the future, we can begin to ask, quite reasonably, whether developments in digital payment technology and changes in payments and banking regulation will bring us to the point of this kind of cashlessness within, say, a generation. Well, never mind a generation, we're pretty close to it now as far as I can see. Let's just say that if you live in Amsterdam, you don't need cash for the trains and if you live in London you don't need cash for the coffee shops. No-one is planning or managing this, it's just happening.

Is this what we want though? This is a form of cashlessness that is too conservative to reap the benefits of a truly cashless economy, too disorganised to reign in the criminal exploitation of cash and too wedded to the symbolism of physical money to switch it off (just as we switched off analogue TV not that long ago). I think that rump cash (and I exclude various categories of post-functional cash from this definition) should be actively managed out of existence.

Active management means that we need to have a strategy toward cashlessness and not simply a laissez-faire acceptance that cashlessness will happen to the great benefit of the majority but in a way that excludes and marginalises some. A recent survey in the UK found that over 75% of low-income households rely on cash, as well as over 80% of elderly households. The shift to cashless society must be planned to help these groups so that they share in the benefits of cashlessness. Having been to China and seen first hand the operation of a cashless society, I think it obvious that we should learn from their experiences, beginning with the observation that people in China are well aware of what happens when society switches from anonymous cash to electronic payments. As observed in the Financial Times, the " scale of data accumulation is beyond our imagination ". The Chinese woman making that comment - while at the same time observing that despite her concerns about privacy, mobile payments are too convenient to opt out of - goes on to say, rather poetically, that she cannot tell whether her compatriots are...

"constructing a futurist society or a cage for ourselves"

Not everyone in China is part of the digital currency revolution. The World Bank Global Findex database, which measures financial inclusion, estimates that as of last year some 200 million Chinese rural citizens remain unbanked, or outside of the formal financial system. As in Sweden, the shift toward cashless is raising issues around exclusion and marginalisation. There are, for example, supermarkets with different lanes for cash or cashless payments that act as physical manifestation of social stratification between, as Foreign Policy notes, the young and the old and between the urban middle class and those left behind. I've written before that we will see the same in developed economies as cash vanishes from middle class life to become the preserve of the rich and the poor who will use it for tax evasion and budgeting respectively.

The response should not be, as in some American cities, to force people to continue to use cash despite the expense, inefficiency and inconvenience, but to find effective digital alternatives for those trapped in a cash economy. I think we should start to plan for this now. I am in favour of Count Zero cashlessness, but I am in favour of it as a policy decision by society that is implemented to meet society's goals. I couldn't disagree more with the Wall Street Journal's view that the move to cashless society " should be left to technological advancement ". No, it should not! This is a matter of great importance and with significant implications for society. The strategy should therefore be set by society, not by technologists.

Many big cities are becoming cashless. It's been a couple of years since I needed to take a wallet to work in London.

David Birch.

Now, clearly, technological advances deliver new possibilities to policymakers and it is good for technologists to explore these possibilities. But, as they say, just because something can be done does not mean it should be done. We need a proper debate and a regulatory envelope set out to move forward so that anyone who needs to pay for anything will be able to do so electronically and that anyone who does not want to pay electronically will be presented with a method for paying in cash, albeit one that someone will have to pay for.

The technology isn't about to make cash extinct but it is about to make it extraneous, so it's time to start thinking about what the requirements for the new infrastructure should be (e.g., security, privacy, access, availability and so on) and consulting consumer organisations, businesses and government departments on their needs.

We need to make the cashless world that we want, not simply accept the cashless world we are given.

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Cashless Does Not Mean What You Think It Means

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A cashless society isn't one in which cash is illegal, it's one in which cash is irrelevant.

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Programmable Trust: A Practical Approach to Governance in the Digital Age A Practical Approach to Governance in the Digital Age from Governing Cyberspace during a Crisis in Trust: An essay series on the economic potential — and vulnerability — of transformative technologies and cyber security on JSTOR

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JSTOR is a digital library of academic journals, books, and primary sources.

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...the move from check-based welfare payments to EBT payments was associated with a substantial drop in street crime ...

In Less Cash, Less Crime: Evidence from the Electronic Benefit Transfer Program (NBER Working Paper No. 19996), authors Richard Wright, Erdal Tekin, Volkan Topalli, Chandler McClellan, Timothy Dickinson, and Richard Rosenfeld investigate whether the amount of cash circulating within a community affects the crime rate. The researchers take advantage of a significant shift in welfare payment schemes that took place across the United States over the last two decades: replacement of paper checks with a digital debit card-based system, the Electronic Benefit Transfer (EBT) program. Although mandated by the federal government, the transition from paper checks to EBT payments was implemented at the state level, most often on a county-by-county basis. This generated substantial variation in the starting point of EBT adoption in different places. The researchers examine monthly data on various types of crimes from all of the counties in the state of Missouri between 1990 and 2011 to measure the impact on various crimes of reduced circulation of cash resulting from the EBT program. They find that the move from check-based welfare payments to EBT payments was associated with a substantial drop in street crime as measured by either reports or arrests. They observe significant effects for burglary, larceny, and assault, and a weaker effect for robbery.

The authors suggest that the most likely explanation for this finding is that EBT payments reduced the amount of cash on the streets that could be taken or used for illegal purposes. Even though welfare recipients still can withdraw their allotted benefits in the form of cash, EBT payments do not require the complete liquidation of benefits as would be necessary with paper checks. This means that the overall circulation of cash on the streets -- especially among those who are particularly vulnerable to street crime -- must have been reduced following adoption of the EBT program. Furthermore, the old system required a significant proportion of welfare recipients with no access to conventional bank accounts to cash their benefits at independent check-cashing establishments, which are also hot spots of street crime. Because cash is critical to the pursuit of many illicit actions, a decline in cash balances can serve as a brake on the cycle that drives street crime and can affect not just predatory offenses like burglary and larceny, but assaultive disputes that are often linked to the heavy drug and alcohol use associated with participation in street life.

The authors reject the hypothesis that adoption of the EBT program simply displaced crime from one county to another, with potential criminals moving to counties that still relied on paper checks. This finding is consistent with studies indicating that offenders tend to operate within their own geographical awareness space, and it supports the contention that the removal of cash through the EBT program has an enduring negative effect on street crime.

-- Les Picker

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Crime Reduction from Cashless Welfare Payments

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the move from check-based welfare payments to EBT payments was associated with a substantial drop in street crime ... In Less Cash, Less Crime: Evidence from the Electronic Benefit Transfer Program (NBER Working Paper No.

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Payment systems, Financial Market Infrastructures (FMIs) and digital financial services (DFS) help expand financial inclusion, foster economic development, enable digital economy, and support financial stability. Given this, promoting safe, reliable, and efficient domestic and cross-border payments systems, and FMIs is an integral component of the World Bank Group’s (WBG) work to reduce poverty and boost shared prosperity.

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Making digital finance more inclusive for all consumers

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Digital finance promises greater financial inclusion, but research shows there are still inequalities. Here are 3 ways that we can make it more inclusive.

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Sweden and Norway are backpedalling on plans for cashless societies over fears that fully digital payment systems would leave them vulnerable to Russian security threats, and concern for those unable to use them.

A combination of good high-speed internet coverage, high digital literacy rates, large rural populations and fast-growing fintech industries had put the Nordic neighbours on a fast track to a future without cash.

Swish, a mobile payment system that six banks launched in 2012, is ubiquitous in Sweden, from market stalls to coffee shops and clothes stores. The Norwegian equivalent, Vipps, which merged with Danish MobilePay in 2022 to form Vipps MobilePay, is also very popular. Last month, it also launched in Sweden.

The former deputy governor of Sweden's central bank predicted in 2018 that Sweden would probably be cashless by 2025.

But Russia's invasion of Ukraine in 2022 and a subsequent rise in cross-border hybrid warfare and cyber-attacks blamed on pro-Russia groups have prompted a rethink.

The Swedish government has since completely overhauled its defence and preparedness strategy, joining Nato, starting a new form of national service and reactivating its psychological defence agency to combat disinformation from Russia and other adversaries. Norway has tightened controls on its previously porous border with Russia.

The security rethink extends to the fundamentals of how people pay for goods and services.

In a brochure with the title If Crisis or War Comes that will be sent to every home in Sweden next month, the defence ministry advises people to use cash regularly and keep at least a week's supply in various denominations as well as access to other forms of payment such as bank cards and digital payment services. "If you can pay in several different ways, you strengthen your preparedness," it says.

The government is also considering legislation to protect the ability to pay in cash for certain goods. Cash is legal tender in Sweden, but shops and restaurants can effectively make themselves cashless as long as they display a notice setting out their restrictions on payment methods.

Norwegian retail customers have always had the right to pay in cash, but it has not been enforced and in recent years increasing numbers of retailers have gone cashless, locking out about 600,000 people who do not have access to digital services. The government acted over the summer, bringing in legislation under which retailers can be fined or sanctioned if they do not accept cash payments from 1 October.

The justice and public security ministry said it "recommends everyone keep some cash on hand due to the vulnerabilities of digital payment solutions to cyber-attacks". It said the government took preparedness seriously "given the increasing global instability with war, digital threats, and climate change. As a result, they've ensured that the right to pay with cash is strengthened".

The country's justice and emergencies minister, Emilie Enger Mehl, said earlier this year: "If no one pays with cash and no one accepts cash, cash will no longer be a real emergency solution once the crisis is upon us." Prolonged power cuts, system failures or digital attacks on payment systems and banks could leave cash as "the only alternative that is easily available", she said.

Max Brimberg, a researcher at Sweden's central bank, said the move away from cash had been driven largely by the private sector. Many of the country's banks abolished cash in local branches some time ago, which made digital payment services easy to roll out to a very willing public.

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The percentage of cash purchases in physical shops has fallen from almost 40% in 2012 to about 10% in recent years, and Brimberg said there was growing concern about cash becoming obsolete.

"That's something that we as a central bank and also the central government see as a potential risk, especially for the people who still haven't adopted the digital economy and also for preparedness if there were to be a weaponised attack or armed attack against Sweden or a close country," he said. "So cash fills a very specific role in the payment system, both because it's issued by the state but also because it's the only form of payment that we can use if the systems for electricity or communications networks don't work as they usually do."

Because all Swedish payment systems were part of one ecosystem, an attack could bring society to a standstill, he said.

"Pretty much any function that you do in society you have to use some sort of payment or verification analysis, either by electronic ID or electronic payment," he said. "All of those would be at risk of undermining the functionality of the entire system in Sweden if it were to fail."

The central bank is looking into creating and issuing an "e-krona" that would act as a "digital complement to cash", but implementation would require a political mandate.

Hans Liwång, a professor of systems science for defence and security at the Swedish Defence University, said there was a lack of evidence about whether cash was better than digital payments in the face of modern threats. Pointing to Ukraine, where digital systems have proved vital to its resilience, he said: "Ukraine is a very good example of moving into the future when there is war rather than backwards."

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Sweden and Norway rethink cashless society plans over Russia security fears

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Rise in hybrid warfare and cyber-attacks blamed on pro-Russia groups prompt Nordic neighbours to backpedal

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Would a Cashless Society Be a Better Society? | J.P. Morgan

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As physical cash use rapidly declines, what would the implications of a cashless society be? We asked two experts to weigh in on either side of the debate.

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Financial and Business News | Finance Magnates

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The Cashless Society: A Paradigm Shift in Financial Transactions

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In recent years, there has been a substantial shift in the way we perform financial transactions.

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JSTOR is a digital library of academic journals, books, and primary sources.

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JSTOR is a digital library of academic journals, books, and primary sources.

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https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3794790

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Going Cashless: Central Banks and Digital Currencies – IMF F&D Magazine - Point of View - IMF F&D Magazine

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How Central Banks should think about digital currencies, digital payments and the future of money. Stefan Ingves, governor of the world’s oldest central bank in Sweden, explains their move to a cashless society.

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The drawbacks of an increasingly cashless society

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“Once you get into the credit economy … you start getting exposed to hidden fees, penalties, identity theft, and it also induces overbuying,” says Ralph Nader.

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Cashed Out: How a Cashless Economy Impacts Disadvantaged Communities and Peoples

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Ubiquitous access to mobile banking, fintech innovations, increased speeds and reduced costs of electronic banking, and changing consumer tastes (including generational change) had been steadily transforming the consumer financial landscape toward greater use of electronic payments.

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Going Cashless: Central Banks and Digital Currencies – IMF F&D Magazine - Point of View - IMF F&D Magazine

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How Central Banks should think about digital currencies, digital payments and the future of money. Stefan Ingves, governor of the world’s oldest central bank in Sweden, explains their move to a cashless society.

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The Federal Reserve Board of Governors in Washington DC.

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Does a cashless society benefit everyone?

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As paper money disappears, in countries from Sweden to India, some might get left behind

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Are we sleepwalking towards a cashless future? – Lessons from Sweden | Visa Navigate

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Insights on future of money from Visa Navigate

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Reducing transaction costs, closing the financial inclusion gap, and fighting corruption are just a few.

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The effect of cashless payments on the internet and mobile banking

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Some of the problems of cash transactions were the inconvenience of handling cash and the limited availability of banking services to facilitate cash withdrawals. The purpose of this paper is to examine the impact of cashless payments on the usage…

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How to become a cashless economy and what are the determinants of eliminating cash

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This paper aims to ascertain the determinants by which individuals decide to use credit cards as a payment method rather than cash; that is, to understand changes in socioeconomic factors on the lo…

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Navigating the Transition: Impacts, Challenges and Future Prospects of a Cashless Society | OxJournal

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The global shift towards a cashless society represents a significant transformation in the way economies operate, driven by advancements in digital technology and the increasing preference for electronic transactions. This paper explores the implications, challenges, and future prospects of transitioning to a cashless society, by drawing on case studies from various countries at different stages of this transition. The study examines the potential benefits of a cashless society, including increased financial inclusion, reduced transaction costs, and enhanced transparency. However, we also address critical challenges, such as digital security risks, the advancements of the technological industry, and the persistence of cash in certain cultures and economies. Through a comprehensive analysis of these factors, the paper provides insights into the socioeconomic impacts of a cashless transition and offers a clear understanding of what lies ahead for the many countries embarking on this evolutionary change. While doing this, we will also highlight that although the move towards a digital economy holds significant promise, it requires careful planning, robust infrastructure, and adaptive strategies to eliminate risks and ensure that this journey is smooth and successful.

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Would a Cashless Society Be a Better Society? | J.P. Morgan

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As physical cash use rapidly declines, what would the implications of a cashless society be? We asked two experts to weigh in on either side of the debate.