The days of cash only have long gone and many locations offer a multitude of payment options including debit, credit, and mobile payments. A cashless economy seemed to be far off in the future, but the expansion of mobile payment systems including Google Wallet, Samsung Pay, Apple Pay and Venmo have made that concept into a reality faster than anticipated.
Consumers have begun to embrace the simplicity of being able to do everything with their phones, including paying for everyday purchases at fast food joints, convenience stores, and department stores. Transactions are expected to surpass $721.4 billion across the world in 2018 alone.
The editor of Fast Company, Bob Safian, discussed how increased cashless payments have both advantages and disadvantages for both society and individual consumers on an interview with CBS This Morning. It’s clear that the trend isn’t going anywhere as smartphone use continues to increase and their capabilities expand.
The primary benefit of a cashless system is that it is very convenient for consumers. Most people keep their smartphones with them at all times, meaning they’ll never forget a card and making a payment is as simple as scanning your phone. It also means getting through the checkout line faster for yourself and those behind you. Retailers also benefit by having less cash on hand, which reduces the amount of a loss if a robbery does happen to occur.
A drawback is that it is easier to track these payments, making it easier for security breaches and threats. This further increases the chances of fraud and identity theft on a large scale when a major company’s security is breached by hackers looking to steal information.
Something else that is worth examining is that a cashless system creates a disadvantage for poorer individuals who don’t have access to bank accounts or smartphones to utilize these payment methods. Some businesses have opted to eliminate cash payments altogether in an attempt to modernize and get ahead of the curve. This leaves some people stuck in the past without a way to patronize these establishments.
It’s something that will need to be addressed as the transition from cash only to cashless payments continues to dominate society and expands to industries where it was never thought to ever exist.