Cashless Economy

Many observers are treating China’s plan for a central bank digital currency (CBDC) as a strictly progressive, technical move that other nations should emulate. The United States, in particular, is concerned that China already has a large head start, which may threaten the dollar’s dominance as a reserve currency. Although the alleged purpose of supplying a digital yuan is to reduce transaction costs and make the payments system more efficient, the Chinese people themselves have good reasons for not sharing that sanguine opinion. The real intent of introducing a digital yuan is more likely to...

As a teacher, I recall doing the same in key skills lessons, tutor time and even foreign language lessons and utilising pretend coins and notes — both domestic and foreign, before moving on to cheques, cards, hire purchase and mortgages. However, a growing trend towards a cashless society and the pandemic supercharging the increase in contactless payment only signs, have become common at checkout tills. Studies have shown, children form their money habits as early as seven years old, as their gaze fixates on watching parents and others make monetary transactions. But what happens when...

Statistics show that the COVID-19 global pandemic has had a major impact on the criminal economy and led to a dramatic increase in fraud. Dr Nicola Harding, Academic Advisor at We Fight Fraud and Lecturer in Criminology at Lancaster University Law School, explores how the pandemic has changed criminal behaviour and its implications for the banking and finance industries. In “#CRIME: How COVID-19 forced ‘everyday’ criminal commerce into the digital banking age”, my recent whitepaper with We Fight Fraud (WFF) shows how criminals are moving towards transacting the proceeds of their crimes via...

The widespread use of cashless payments including credit cards, debit cards, and mobile apps has made transactions more convenient for consumers. However, results from previous research have shown that such cashless payments can increase consumers' spending on unhealthy food. "Why Do Cashless Payments Increase Unhealthy Consumption? The Decision-Risk Inattention Hypothesis," a newly published article in the Journal of the Association for Consumer Research, explains this phenomenon by showing how changes in bodily responses to cashless payments influence consumers responses. Authors Joowon...

The rise of cashless pocket money means children are in danger of no longer understanding the value of money, a think tank warned. A report by WealthiHer found that the number of 11-year-olds receiving an allowance paid directly into a bank account rather than handed over in cash has risen by 20 per cent in the past six months. It said that without better financial education in schools, the demise of children handling actual notes and coins could lead to them having a lack of understanding of financial basics. Read more

Cash still accounts for a significant share of payment transactions in most advanced economies (Bagnall et al. 2016). However, it is a widely held presumption that the recent innovations of contactless, mobile and instant payments will accelerate the move to a cashless society. This would pose challenges to central banks who have a mandate to guarantee a safe, efficient and broadly accessible payment system. To counterbalance ongoing payment innovations and an expected strong decline in cash demand – as has been observed e.g. in Sweden – many central banks are now contemplating the...

When we think about ecology and reducing our carbon footprint, suppressing cash might seem like a good idea: no trees cut, no paper used, no transportation and so on. Yet, a closer look at cashless payment means shows that using cash actually produces less carbon emissions. Read more

Cashless payments are on the rise, and children have less opportunity to hold physical money in their hands. Banks issue cards for children, and you can easily find an application to track your kid’s payments on AppStore or Google Play. However, electronic piggy banks come at a cost. Cashless payments affect how children perceive the source of income and what they think about savings. They also deprive kids of important communication experiences, and these effects may have an impact in the future. Read more

Economist John Howland Cochrane addressed the question of new cryptocurrencies, cashless societies and the future of tax evasion. At the heart of his concerns, lies the question of privacy. Governments, to contain tax evasion, are favorable to the war on cash, and considering using a blockchain-currency of their own. To be fair, it was initially the banking sector’s idea, but governments had similar and compatible interests in acquiring more economic visibility - something cash does not provide. Whichever the medium used, the idea is to make all payments appear on radars of banks and the...