Cashless economy is a debatable topic. A cashless economy is a financial environment that minimizes the use of physical cash by providing alternative channels for making payments and fosters a clean and digital economic culture.
Like two sides of a coin, this concept has both its advantages and disadvantages. A cashless economy can provide greater transparency of sources and uses of money in the financial system, helping to curb black money, lessen tax evasion and the funding of illegal activities.It can also save the cost of producing a coin which can be more expensive to make than it is actually worth. Alternatively, it is important to consider technological aspects like cyber security and user privacy issues, as well as social aspects like the widening gap between younger and elderly generations who may not be adept at cashless transactions.
Here are 5 countries that are quickly emerging as cashless economies:
It is forecasted that Sweden will be the first cashless economy in the world by 2030. Market traders, churches and magazine vendors all accept card and phone payments. More than 900 of Sweden's 1,600 bank branches no longer take cash deposits. Cash transactions account for only 1.4 percent of the value of all payments. In fact, Sweden's Riksbank, the world's oldest central bank, is considering launching a state-guaranteed national cryptocurrency: the e-krona.
Singapore has ambitions and capabilities to become Asia's first cashless country. It has one of the most bitcoin-friendly business environments in the world, welcoming the set up of bitcoin funds. Singapore is replacing cash with QR-code based payments instead. This initiative is aimed toward small and mid-size enterprises which account for approximately 99 percent of the businesses in Singapore. This strategic approach of working with smaller scale businesses
South Korea has plans to cease production of paper money and instead move to non-cash transactions as part of the cashless society project. According to the Bank of Korea, cryptocurrencies and blockchain technology will be the basis of this project. Aside from providing convenience and reducing costs of producing new money, the government is vested in a cashless society to fight against an underground economy that is largely dependent on cash to thrive.
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A country and a continent, Australia is believed to rise as a cashless economy after Sweden. In November 2016, Citibank in Australia decided to remove cash at all its branches, including no cash machines. The decision was based on a lack of consumer demand, as the bank reported only 4% of its customers made cash transactions at a branch last year. This depicted a major shift in consumer preference of digital payment over cash.
A top Asian economy, China has experienced a robust growth in cashless payments in the last few years. People rely on AliPay and WeChat Pay systems which use QR Codes to make payments for almost anything. The seamless use of phones as wallets has, in turn, advanced China to potentially become the largest cashless economy in the world.