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Cashless society – Are we there yet?

Amidst the fallout of Covid-19, there’s a new ‘new normal’ becoming more prominent. Is the world heading towards a total cashless society? 

In many ways we’re living in a cashless society already. Your assets are digitalised. We get paid into the bank, we rarely see physical money in large amounts and if you buy a property it’s very seldom I’ve seen someone turn up with a duffle bag full of cash.

Across Asia, banks are partnering with fintech start-ups. Bridging the gap in the financial and technology crossover space, it is big business that affects our daily lives.

BRI (Bank Rakyat Indonesia) has partnered with Alipay to expand POS (point-of-sale) mobile payments, catered mainly for Chinese tourists visiting Indonesia. Thailand’s Kasikornbank and Grab have teamed up, launching GrabPay by KBank, a mobile wallet. Nearly all banks have their own rendition of a Banking App. Paying for something as simple as a coffee, utilities or taxi can be done with a quick QR scan or transfer.

Usage of physical currency is becoming less visible in Asian society.

My first taste of a cashless society was during my first trip to China. Paying in cash wasn’t impossible, however I did get turned away at some restaurants as they were reserved to WeChat payment only.

For those that don’t know, WeChat is the daddy of all apps when living in China. Think all your apps rolled into one. Social Media, Banking, News, Taxis, Shopping, Deliveries and much more.  A super app where pretty much everything is in one place, with everything visible to the government.

With the proposal of Tracking Apps being encouraged by multiple governments globally, it seems inevitable the idea of super apps will stretch further than China.

Convenience at a price?

With cashless payment becoming more accepted, Some could argue that once you have no hold of physical currency, the control of your digital cash is in the hands of banking institutions and governments. Without cash, your control over your immediate assets becomes a digital illusion, controllable and possibly manipulated by the powers that be.

There’s an argument that governments and banks would have the right to reserve, hold on to, postpone or lock your available funds in case of pandemic, economical crash, civil war, protests, refusal to cooperate, tax, refusal to be vaccinated, even if they were in the wrong. Should we listen to this and retain our right to use cash as a legal tender more often? 

The main points made for a “cashless society” are: Without cash it is easier to trace from where all money is sourced, thus eliminating money laundering, be it from drug and people trafficking or cleaning money made from tax evasion. In a cash free environment not only will this be more difficult but without a cash in hand society, it will also help eliminate “cooking of books” i.e. VAT, Income Tax avoidance, etc…

In a cashless society payments and economic transactions are traceable. Privacy is certainly an issue in the digital world. Businesses and organizations can utilize all this information to their advantage, predicting future transactions, creating consumers profiles based on their spending habits, clearly visible with the amazing feat of current targeted Ad technology, readily available to use at a fee.

Cashless society imminent?

In an era where contactless payments are becoming the recommended norm, cryptocurrency enthusiasts have a rare opportunity to advance their argument of cash becoming obsolete. However with banks moving quickly towards digital payments and currencies they will win the argument but lose the war when banks start representing more viable options for the majority of people.

In theory it seems now would be the opportune moment for governments to phase a cashless society into our daily lives even more than it is already, whether we like it or not. 

However one recent example might serve as a harsh warning to governments wanting drastic change. In 2017 India made a radical move in their effort to fight corruption. India attempted to eliminate nearly 85% of their circulated cash. However, they were far from ready to take on this drastic move into a cashless society. Most Indians were so highly dependent on cash, they didn’t even have a bank account. The entire Indian economy crashed. Even with a harsh warning like the 2017 Indian economic crash, a cashless society seems inevitable, it’s just a question of when.

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