The convenience of payments means in a cashless economy

The appearance of immaterial payment systems has increased economic convenience for citizens. From there, payment solution companies go double-or-nothing, promising that going full cashless would be even more convenient. But the inconvenience of going to an ATM will be quickly replaced by new, far more tedious ones, should the cash option disappear.

Long gone are the days when customers had to walk to the bank to access their own funds, the banks and payment companies celebrate. According to champions of the cashless revolution, a sub-segment of the digital revolution, a cashless world will make consumers lives easier and more convenient, with no bills to fetch at the ATM, count and hide away. After an over 10% increase in 2015, cashless payments are expected to grow to 0.72 trillion dollars worldwide by 2020. Countries such as Sweden and Denmark are particularly advanced in this race, and their citizens readily admit that convenience is a large reason for the change in their habits. “Digital transactions can be more convenient if you don’t have cash on hand or if you don’t have perfect change. More than half of Swedes already use Swish, an app developed by six Swedish banks. (…) According to a recent survey by Riksbank, the central bank of Sweden, only 16 percent of respondents used cash on their last purchase”, reports Jennifer Williams for Credit Karma.
Other countries are following suit, with Australia’s Citibank going cashless, for instance, for the same announced reasons of customer convenience. “​Citi is removing cash from its Australian bank branches, because it is no longer worth offering a service that is used by less than one in twenty customers. As consumers embrace digital banking and the role of cash dwindles, the US bank said its six Australian retail branches would remove cash handling services”, says Clancy Yeates for the Sydney Morning Herald . So, would going fully cashless really increase consuming convenience?
Cashless systems have flaws of their own, many of which untold. They generate hidden costs, with payment solution companies adding 1.5% to 3% to the purchasing cost, to start with. But to remain on the specific point of convenience, their practicality has its own shortcomings. They rely on a functional and available network of power and communications, which mechanically excludes many categories of people, for whom a cashless world would quickly turn into an inconvenience nightmare: the digitally illiterate, the elderly, the unbanked, the homeless, and foreign travelers are just a few of those groups for whom cash is the best convenience, compared to digital systems they neither have nor master.
Today, over 20% of the world’s population remains unbanked , which amounts to 1.5 billion people worldwide. Even for the general public, cashless systems have built-in inconvenience: online fraud (with unlimited theft potential), identity theft, password memorization, drained phone batteries, no-service areas. A connected and well-travelled business person travelling abroad will always find more convenience through a local ATM, be it at a small fee, than by setting up an account for payments and communications. According to economist Ian Bright , Business Insider reports, “a cashless reform would not bring the convenient paradise it promises. And according to some of his colleagues, it would bring about a dystopian future. Whoever would stay within the system would indeed find more convenience. Whoever would be on the edge or outskirts of the system, by fate or by choice, would be further outcast.” Cashless societies provide a set of inconvenience of their own, and deepen the inconvenience for whoever is not in the mainstream.
Cashless systems can indeed beat cash in convenience in certain solutions, but the opposite is just as true. In the end, the co-existence of the two systems simply increases the flexibility and number of options for the individual to use whichever is better suited to his needs. The abolition of cash amounts to a dangerous reduction in options, with many disadvantages for various population categories. All in all, it can hardly be argued that suppressing one fundamental option is a good way to increase convenience.

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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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