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Less inclusion, more inequalities: the heavy assessment of the Cashless Economy





Online banking, mobile finance and various payment technologies are extremely popular nowadays. Some already use their mobile phones as a true replacement for a wallet, and some would not remember the last time they paid in cash. And then, there are others – those who, for various reasons, continue to use coins and bills as their main means of payment. In the cashless debate, their voices are not so loud, but they still deserve to be heard.
 
A complete shift to the cashless society would mean the suppression of a daily and central means of payment for the poor and the elderly. How is it even possible if social benefits have long been transferred into a non-cash form, charitable foundations and aid organizations operate on a non-cash basis, and banking applications have become so simple that even the most non-tech savvy people can handle them? However, if we view money not only as a means of payment, but as a social concept, problems that are not obvious at first glance will emerge.
 
Technological barrier to better life
 
First, it is the question of inclusion of those who have difficulties with technology and its use. For instance, the United States is considered one of the most communication-developed countries, but even there, almost half of the elderly population has problems with access to the Internet. Add the difficulties that seniors often face when using technology, and we have an obstacle serious enough to ignore. "Older Americans are not as tech-savvy as younger generations and will likely be affected negatively due to their more limited use of electronic forms of payments," says Plamen Nikolov, assistant professor of economics at Binghamton University, State University of New York.
 
It’s the same with low-income earners, but, in addition to limited access to the Internet and technology, they face barriers in banking. “The banking system is not designed with low and middle class households in mind”, writes Vassilisa Rubstova of Berkeley. For those people, maintenance of a bank account becomes unprofitable, and fees within the system (such as ATM withdrawal fees, debit card swipe fees or wire transfer charges) inflict an additional blow on the wallet of those who are already struggling with finances.
 
Underpriced labor
 
Some people need cash not only to keep their small income intact, but also to earn extra money. This is especially true for waiters, couriers, taxi drivers and in general those who rely on tips. Although the amount of tips per person is usually small, they play a large role in our society - at least they did until recently. A few coins or small bills, given after a good dinner, did not bring much damage to a customer’s budget, but played a big role for their recipient.
 
Now, however, this type of assistance is gradually becoming a thing of the past. It turns out that in the new digital age, people trust banks and intermediaries less: the 2021 Tipping Index survey held in the UK showed that many feel unconfident leaving e-tips, and some were unsure that their gift would go to the right person. They are right, says Workers United labor union: over 80% of service workers had experienced wage theft at least once in their professional life. When customers leave e-tips, there’s no guarantee the employee will receive the full sum due to processing and other fees, says Clara Wheatley-Schaller, political director at Workers United, which proves that the cashless society indirectly demonetizes value of labor.    
 
Universal remedy
 
Development of the modern society has achieved significant success, but has also exaggerated some problems. With this in mind, promotion of a complete transition to the cashless society looks like an offer for the elite, exacerbating inequality and cutting off those who cannot completely abandon printed and minted money. Is it possible to live your life to the fullest when you are completely marooned from the financial system?
 
Essentially, money can be compared with another sphere of society's life: transport. Here, e-money will be like a personal car. It's convenient, it's affordable, and it's already used by millions of people. However, there are still some more millions of those who cannot or do not want to have their own auto, such as children, seniors or people with disabilities. Some are not able to drive, and others simply cannot afford a car and the associated costs, like gasoline or insurance. Do we exclude them? Obviously no, and those people are offered public transport as an affordable uniform alternative. Cash is just as versatile. Its use does not require special knowledge and additional devices, bills and coins are available to everyone and, as such, embody inclusiveness and universal access for all.
 
It often happens that seemingly insignificant things play a huge role in the system in which we live. And so does cash: bills and coins in your wallet are part of a larger financial system that supports the foundations of our society. Are we really ready to undermine the established order and make the life of a part of society uncomfortable for the sake of promises of a bright cashless future?
 



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The cashless society from an ethical point of view

The debate about the move towards a cashless society has been at the center of the scene for several years, now. Various angles have been taken by economists, politicians, banking institutions and sociologists. Beyond the technicalities of the debate, lies the question of freedom, of inter-citizen solidarity and of governmental responsibility. The debate cannot remain in the hands of financial specialists, it is first and foremost an ethical, political and societal issue.










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