Blog

Some prefer cash payments, while others (like me) prefer to pay only with a card. Let’s take a look at the pros and cons if we ever move towards a cashless society.

A key point is the increased security that cashless payments would bring. Carrying cash involves risks such as theft or loss, which can be significantly reduced through electronic payment methods. Cash advocates often see things differently, emphasizing the dangers posed by cyberattacks. True, that risk exists, but banks and large institutions take precautions against such threats, and ultimately, personal security often lies in individual responsibility.

Illegal transactions would generally decrease in a cashless society, as the traceability of electronic transactions makes it much harder to engage in illicit activities like money laundering and tax evasion. Cash remains anonymous, making it easier for criminals to conduct such activities. Many cash proponents express concerns about privacy, but keep in mind that security mechanisms are also in place for electronic payments. If every transaction is traceable, we must ensure that individual freedoms are preserved and access to financial services is fair.

Another significant advantage of abolishing cash is the opportunity for central banks to achieve monetary policy goals more efficiently. Digital transactions allow for more precise control over the money supply, which can contribute to economic stabilization and combat inflation. Critics often argue that reliance on digital payment methods makes financial systems more vulnerable to disruptions, especially during power outages. In such cases, transitional solutions like vouchers or prepaid cards could be helpful in maintaining payment flow. However, these aspects need to be thoroughly addressed and secured in advance.

Moreover, reducing paper money and coins has positive environmental impacts. The production of cash consumes resources and generates emissions. So, there are even positive effects here.

What would change, however, is the culture of gifting money. The way monetary gifts are given could transform. But I believe there would still be plenty of alternatives, such as digital gift cards.

Closing Words

Living cashless is simpler. It speeds up the payment process and actually has no significant drawbacks, provided all security aspects are taken into account and effectively implemented.