A Look Around the World on How It Is Going Cashless But Not Without Problems
In the UK, the most popular way to buy things is through plastic payment cards while only 30% of transactions are made using coins and notes. This figure is further expected to fall as low as 10% in the next 15 years. This has the cash making machinery disappearing across the UK with over 3,000 bank branches already been shut down in the last four years. These branches are closing at a rate of about 70 per month while cash machines are disappearing at a faster rate at 300 per month.
“It would be naive to think we’ll be living in an economy of notes and coins in the mid- to long-term future,”
said Helen Prowse, a spokeswoman for digital payment company Square.
While China Wants its Rural Villages to Go Cashless by 2020
Meanwhile, in China, a plan has been set by five of the country’s top regulating bodies to make online financial services more accessible to its rural residents. As of 2017, 42 percent of its population still remains rural that means digital payments have considerable room to grow. In 2017, 76.9% of China’s adults used digital payments while in rural parts this ratio was 66.5 percent as per the Central Bank report.
Saudi Arabia Aims to Become Cashless
Saudi Arabia is also aiming to reduce the dependence on cash circulation by facilitating an electric payment environment. Dr. Ahmed Abdulkarim Alkholifey, Governor of Saudi Arabian Monetary Agency (Sama), shared the plan after opening the MEFETECH banking Fintech, and payments conference and exhibition in Riyadh.
For this, Saudi payment Company was established at the end of last year.
“The role of the company will remain as a legislative body working to develop regulatory frameworks, update policies and licenses for the work of these parties, and monitor them to serve the objectives for which they were found, in particular, to reduce the cash circulation in all commercial sectors,” said Alkholifey.
With Sweden Leading the Way
Sweden is expected to become the world's first cashless society by 2023 which means cash will be no longer accepted as a means of payment in the country. Now, more than 80 percent of all retail transactions are being conducted electronically. This can also be seen in other Nordic countries like Iceland, Norway, Denmark, and Finland.
In 2012, six of Sweden's largest banks Danske Bank, Handelsbanken, Länsförsäkringar, Nordea, SEB and Swedbank and Sparbankerna came together to launch the Swish application. The Central Bank of Sweden is further planning to introduce its own digital currency e-Krona in order to accelerate the cashless society.
But Looks Like the US Won’t be Cashless Anytime Soon
However, things might be going in opposite direction in the US as it has been revealed that cities like Washington DC, Chicago, and New York City could force shops and restaurants to accept cash. This came after the New Jersey Legislature and the Philadelphia City Council passed a measure for stores who do not accept cash that they could face financial penalties on the issue that cashless stores discriminate against unbanked.
Recently USA today had shared, “the volume and value of U.S. currency in circulation have been on long-term upward trajectories, reaching record-high levels, according to the Federal Reserve.”
But What’s Next after Going Cashless?
But going cashless comes with its own issues. Digital payments don’t offer the anonymity like cash and the cards’ track every move of the user. Also, people are not comfortable with giving banks full control over their money. Another crucial problem comes with the outages as recently happened with Wells Fargo and before that with Mastercard that left people with no access to ATM machines, and online and banking services that left people in the lurch and angry.
So, what’s the answer? Bitcoin!
The uncensored and borderless digital currency that eliminates middlemen and is limited in supply unlike, cash and in all of its 10-year existence went down only once.