PROS AND CONS OF COUNTRIES GOING CASHLESS

Although many have embraced cashless transactions, and there have been calls for wider, society-wide, adoption, many countries are not moving with alacrity to do so. Why might that be the case? Here we outline some of the benefits and concerns that ought to be considered when a country decides to go cashless.

If many of us had our way, we would pay for everything electronically, such as via credit and debit cards, mobile money, and digital wallets. However, and to a considerable degree, many countries, especially those in the Caribbean, are still cash-based. In 2019, cash is still the only way to pay for a broad range of goods and services, which means that it can be difficult – to near impossible – to move around without having some cash at hand.

However, what does one do if you are on an island that inherently does not have cash: no bank; or no ATM (automated teller system)? There are quite a few such places across the Caribbean region, especially in multi-islands states, such as those of the Bahamas, the British Virgin Islands and Saint Vincent and the Grenadines. The population of some of the inhabited islands are too small to support the installation of bank or even an ATM, but there might be schools, shops and other entities that do business there.

Going cashless might seem to be an obvious choice. However, whilst there might be several benefits, challenges also exist, that ought to be carefully considered and possibly managed. Below we outline some of the pros and concerns should a society decide to go cashless.

PRO:  CONVENIENCE

By far, one of the benefits of going cashless, is the convenience it offers. Customers can make purchases when they choose, without having to ensure that they have sufficient cash at hand in order to do so.

PRO:  SAFETY

Back in the day, if you had to carry large sums of money, it used to be a nerve-wracking affair, as frequently, there was the fear that you might get mugged, and the cash stolen from you. Sometimes, you may even have asked a friend, colleague, or family member to accompany you wherever you needed to go – just in case. In a cashless situation, there is no longer the need to carry large amounts of cash. Hence, associated concerns about one’s physical safety, and getting cash safely to one’s destination, tend to evaporate.

PRO:  TRACEABILITY OF CASHLESS TRANSACTIONS

If you think about it, there is a certain anonymity associated with cash transactions. It is difficult to monitor and differentiate between exactly which notes or coins an individual uses for a particular transaction. The anonymity and lack of traceability of cash is exploited in a broad range of crimes, including bribery, money laundering and counterfeiting of currencies. However, in a cashless payments framework, all transactions are traceable, and to a considerable degree, are not anonymous. Hence, it can act as a deterrent, or at the very least, make it more difficult to conceal many of the crimes with which we are plagued today.

PRO:  SECURITY OF TRANSACTIONS

When compared to cash transactions, cashless payments are considerably more secure. In addition to using technologies, such as end-to end encryption, and other anti-fraud measures, other security features are also employed in order to facilitate successful completion of cashless transactions. They can include personal Identification Numbers (PINs), fingerprint scans, retina scans, and voice and face recognition, all of which can result in greater peace of mind to users and the public at large.

CONCERN:  POTENTIAL FOR GREATER SURVEILLANCE

On the flipside of the traceability of cashless transactions, that very same traceability offers more opportunity for individuals and their transactions to be monitored and tracked. Currently, there already is a concern about the degree of surveillance that countries are conducting, which in some instances it could be argued, violates an individual’s right to privacy. The inherent traceability of cashless transactions could provide another avenue through which an individual’s activities can be tracked, whilst also raising questions about the circumstances under which, and by whom, that information can be accessed.

CONCERN:  INCREASED RISK OF CRIME

One of the prevailing concerns in this digital age, is the prevalence of cybercrime. Cybersecurity professionals and law enforcement tend to be many steps behind the criminals, and typically operate in remediation mode: to address vulnerabilities that have emerged based on the incidents that have been experienced.

In a cashless society – where there is no longer any benefit in trying to rob a brick-and-mortar bank – the full attention of criminals can be placed on trying to crack those digital systems. Hence, the risk of crime could increase.

CONCERN:  FINANCIAL EXCLUSION OF SOME SEGMENTS OF THE SOCIETY

Finally, and unless properly managed, there is a risk that those who do not currently conduct digital payments, such as the unbanked and the elderly, or those who do not have quality Internet access, for example, could be further marginalised in a cashless framework.

Additionally, among many, there is still the mindset that cash represents security. Hence, a process might be needed to facilitate a smoother transition to a cashless society, in order to ensure its universal acceptance and long term success.