A cashless society, will this be the new norm?
How often do you go to an ATM? In fact, can you even say for certain you would know where to go if you needed to withdraw cash? A lot of the machines and bank branches that you used to visit have disappeared in recent times.
While a cashless society still seems a long way off, we are actually most of the way there already. The last time you saw a bundle of cash was probably when you were handing it to a tradie after getting something fixed at your house.
These days, people are tapping cards, phones, watches and even rings to pay for their morning coffee and you might even get a funny look if you pull out cash to pay for something.
Some people have embraced the move to a cashless society so openly that they are talking about implanting microchips in their fingers as the next logical step …talk about putting the digit in digital payment!
But others are not so sure and are comforted by having the back-up option of physical cash. So let’s look at some of the pros and cons.
Convenience is king
One of the great benefits of paper money was that we no longer had to carry around chests of gold and silver. Likewise, debit cards meant carrying all our money in a small rectangle of plastic. Now, people need only take their phone or watch with them and leave their wallets at home altogether. Apps can provide digital wallets where many different cards can be brought up by tapping and swiping away.
If you’re out to dinner with friends, you can split bills on the spot and in some cases even pay a mate by texting the money to their phone number.
You can pay people instantly on other sides of the country and even the world. It’s hard to argue with the convenience of that.
While members of older generations might be suspicious of digital payments, imagining being scammed by someone lurking in the dark corners of the internet, your money is protected by more layers of security than ever. If you have a digital wallet on your phone for example, a thief will need to figure out how to unlock your phone before even trying to find and use your cards.
Compare that to physical cards, where they could go on a tap and go spree before you even realised your wallet was missing.
Banks these days are also super plugged in to your spending habits, so if you do get skimmed or fall victim to a scam, your institution can flag and even put temporary stops on rogue transactions until they get to the bottom of the situation. If someone drains your account, the bank is usually able to replace the money for you.
A little privacy?
The above monitoring of your habits is the perfect segue into the cons of the digital currency world. Every transaction you now make will be traceable by financial institutions, the government and whoever else those parties decide to share your data with.
If you hand cash to a tradie, or to a friend, there is are only two of you involved in that transaction. But if you tap and go, there’s you, the bank, the business you are paying and the company (eftpos for example) that makes the technology that facilitates the payment. All those entities get a slice of your money and your data.
No more mattress accounts
A cashless society would mean you have nothing physical to show for your wealth. It will only be a number on a screen.
Right now, your money is represented by a number on a screen, but you have the opportunity to withdraw your cash and stick it under your mattress. It’s yours and it can’t be taken off you by bank or government, unless they break into your house. A cashless society would put an end to that. Numbers on screens can be subtracted from easily enough.
Decentralised and centralised
Why do you think Bitcoin values recently shot up? It’s because Bitcoin is basically the world’s purest form of currency. It’s decentralised, which means it can’t be manipulated or controlled by central banks or governments. People want to own Bitcoin so that they have wealth – or currency to trade for assets and goods – that can’t be interfered with.
Unlike Bitcoin or other forms of cryptocurrency, an Australian digital only currency would be centralised, as in controlled and manipulated by the RBA and the government.
The best way to have some level of ownership over your wealth would be to acquire good physical assets; things like property, or gold and silver. Their values may rise and fall, but they can’t disappear overnight like shares or numbers on a screen.