Is an entirely cashless economy the future?

Ever since Bitcoin made an entrance and became a household name, experts have been wondering if a transition to an entirely cashless economy is likely. As the rest of our world has become increasingly digitized, it seems ever more likely. For example, NJ Online Casino List has recognized that more and more people are moving towards online casinos as every element of our economy, including gaming, moves to the digital world. 

However, it is easier for some elements of the economy to make the transition to digital than others. Many people rely on cash, and some countries and cultures are more likely to prefer cash to using cards, mobile payments, or cryptocurrencies. So how likely is it that we really will live to see a cashless economy? 

The rise of digital 

When considering the likelihood of a cashless future, it can be useful to reflect on the rise of digital in the economy. Only ten years ago, roughly six of every ten transactions were made using cash; now, out of every ten transactions, about three are made using cash. 

This massive increase in the use of digital transactions is in part because of the improvement in technology and security, along with the cost of digital slowly decreasing. Even in the last few years, digital payments have become easier to make, and a slew of online banks and cash sharing apps have bolstered the digital tidal wave. 

The shift towards digital makes it clear that our payment methods are changing quickly and that, for the most part, consumers are willing to adopt these new changes and payment techniques. As smartphones become more and more ubiquitous, and we continue to engage with the digital economy, digital transactions and payments will grow in popularity. 

The potential dangers of going cashless 

So, what is stopping countries around the world from fully transitioning to a cashless economy? Several factors are slowing down the move away from cash. It is true that going cashless can help a country to cut down on crime and to more easily collect essential data? Some potential issues and challenges are also associated with the transition away from cash. 

One of them is technology. While there has undoubtedly been a massive increase in the amount and quality of digital payments technology, more digital infrastructure is needed before a full transition away from cash is possible. Security is another concern as an increased move towards digital payments means that there will be more cybersecurity threats and attacks. 

In 2019, an independent report titled “Access to Cash Review” was published in the UK, and it highlighted a number of the associated risks. The report warned that financial institutions and banks already underserve working-class individuals, low-income families, and people from rural areas in the UK, which are rapidly transitioning to digital payments and services. The “Access to Cash Review” noted that a large portion of the UK population – up to 17% – would struggle if the economy continued to transition away from cash. 

In every population, some demographics are less well connected to the digital economy than others. When the economy moves away from cash and towards fully digital payments and transactions, the challenge then becomes inclusions and ensuring that everyone in society is still able to participate in the economy.  

The move towards an entirely cashless economy is one that takes years of research and in-depth coordination with individuals and interests from every element of society. However, with such a massive shift in economic behavior, the process mustn’t be rushed.

Sweden leading the charge 

Sweden was one of the countries to push forward with a transition to a fully digital economy. Now other countries can look to Sweden to learn about the benefits and pitfalls of going fully digital. In Sweden, it became clear that retailers and banks preferred digital transactions, and most citizens preferred digital unless they felt they were being forced to adopt it. 

However, many people in Sweden also felt like they had been forgotten and left behind during the transition. Some individuals thought that they had been socially excluded and also found that, for them, it was suddenly much more difficult to budget as they were accustomed to using cash to balance their budgets. 

As Sweden continues to transition and develop its economy, other countries in the world can look to its example and learn about the challenges and benefits of transitioning.