A cashless society is an economic state where financial transactions are not conducted with cash or physical money. In easier words, we can say that a cashless society is the one where no banknotes and coins are used for any type of financial or economic transaction or purchase. The transactions and purchase are rather done digitally between the parties, which is an electronic representation of money. Cashless society is not a new concept and it existed long before the concept of money, and it was known as barter system, where goods and services were given in exchange for goods and services. Digital transactions are a bit similar to that to barter system as in both the cases there is no transaction of physical money. Cashless transactions have become possible with the use of debit cards, credit cards, and mobile wallets like Tez, Phone pay, Paytm, online bank account transaction and also through digital currencies such as bitcoin. However, all these have made the process quite easy and comfortable for the people. As now there is no need to worry about cash and going banks and ATM frequently. But there is a lot more to consider than the ease and convenience. There are some concerns related to privacy and control as every purchase and transaction are now recorded somewhere and monitored by someone. While a majority of people don’t mind this, some people want their transactions and purchases to remain private for multiple reasons.
Advantages of a Cashless Society
Efficient and Convenient
Going cashless reduces the hassle of drawing cash and frees from the tension that whether cash-in-hand is sufficient to make a payment or not. With cashless and digitized payment system it has become more efficient and convenient for the masses. This also speeds up the process of the financial transaction.
Electronic transactions of the money have increased the transparency as all the electronic transactions are recorded.
Can Help Government Track Money Movement
With financial transactions records, Government can track the movement of the money which enables to track the illegal and black money transactions taking place in the country. This can be of great help to remove corruption from the country and can help India to emerge as a better and corruption free country.
Cashless payments eliminate the problem of counterfeit money and illegal cash totally. Digital payments can also reduce the risks of storing cash and fear of money theft.
Cashless and digital payments facilitate the tracking of spending expenditure in an easier way. Recorded transactions can help people to refine their budget more efficiently and can also help to save more.
Issues with cashless Society
In a digitized economy, transactions can be traced and with traceable exchanges, there are records which have the potential access. These traces make the transaction sensitive and accessible. Such exchanges permit organizations an approach to manufacture a customer’s close to home profiles in light of their spending designs. The issue of information mining likewise come into put as nations head towards a cashless society.
With boons, banes also exist! On one hand where digitalization has made all the financial process easier threat of security has also increased. Your data as such bank account details and passwords can be hacked. Although it comes under the cybercrime, still threats and safety issues exist.
Elimination of a Certain Population
If our society is fully digitalized, few sections of our society cannot be included in it. This includes the poor and some senior citizens of our country. This is because to implement a cashless society to have a bank account, smartphones/ computers are necessary. And we all are aware that all the poor don’t have a bank account and if they have they don’t have smartphones or computers. Whereas with the senior citizens they don’t hold the power and knowledge of engaging in digital transactions. Hence, if we move towards a completely cashless society will have to exclude these sections of your society which is not possible at all!
Disadvantages of a Cashless Society
In electronic payment means there can be privacy issues. You have to trust the bank handling your data, but your payment information could turn up in ways that are impossible to predict. There is a kind of threat involved regarding hacking & miss use of your valuable data.
When you spend cash, you can fell and calculate how much you are spending. But spending electronic, you don’t get that fell. It is always easy to swipe & spend rather than to calculate in hand and spend.
Technical errors can happen, you might have seen gateway error, payment failed, payment unauthorized, etc coming on your screen when you are not able able to make a payment. This also results in debiting of amount from your account while your bill is not paid.
The poor and unbanked section of the society can’t match with the medium and upper section of the society who are using online transactions as they are not that educated nor they have smartphones and computers to do the transaction. This creates inequality in society.