A cashless society – being all monetary transactions conducted electronically – has been a topic of growing interest in Australia. Gone are the days of stashing your cash under the mattress for a rainy day. The majority of our population now keeps their money in the bank, makes payments using direct debits and credit cards, and takes up credit facilities like Afterpay. Moving towards a cashless society has both benefits and drawbacks, so let’s investigate what those are and whether cash actually is still king.
Our society thrives on convenience. Heading to the ATM to withdraw cash, to then head to wherever you need to make payment requires time and effort, which most of us don’t have in today’s fast-paced environment. Mostly, we receive our wage electronically now, so the convenience of not having to handle physical cash to make our own payments is attractive. Not only that, but card or mobile wallet transactions at the checkout are much faster as well.
Cash is untraceable, so for Australia as a society and its economy, digital payments are beneficial as they make it harder for businesses and individuals to hide income or evade taxes, as all our electronic transactions leave a trail.
Cash was the main agenda for robberies, muggings and fraud. Digital payments are safer as you no longer need to carry large amounts of cash, which lowers the risk of theft and loss.
I am addressing two populations here. Firstly, the elderly’s digital literacy is lower than other generations who grew up in predominantly digital world. Most (but not all) of the elderly generation may not easily access smartphones, online banking and payments. So they either need to rely on others, or hold cash, to navigate their monetary transactions.
Lastly, and we are yet to see the outcomes of this, I believe the children growing up in a digital world lose value for money, because they believe if you can just tap the credit card, then everything is fine. Without actually seeing the cash and seeing how it works in day-to-day life, there is no understanding of the value of money. So their digital literacy, and understanding of ‘money’ requires acute learnings to avoid financial issues.
Remember when the Crowdstrike outage affected Microsoft systems worldwide? No-one could access their money and no digital payments could be made and/or accepted. Australia literally almost came to a holt. Luckily, it was eradicated fairly quickly, but continuous events like this would be unplanned and disastrous for both the population and economy. And let’s face it, system failures like this will happen again, as human error always seeps in. The question here is, are we prepared for that?
In line with this is cyber crime, a cashless system is more vulnerable to hacking, data breaches and cyber threats. We wouldn’t be vulnerable to this if our cash was still under the mattress!
Digital payments leave a trail and there is now a concern about how personal financial data is being used or shared with corporations, governments and third-party organisations. This gives them increased ability to monitor our spending habits and personal behaviour. When we earn our money, we should be able to use it without the paranoia of thinking that every move we make is being surveilled to be used against us in an authoritarian manner.
So is cash king? Or is digital money taking the crown? Overall, I believe that a cashless society is inevitable and it’s happening at a speed that we are not keeping up with, meaning legislation isn’t being put in place fast enough to protect us from the cons discussed above. The cons need to be addressed before the inevitability catches up to us. For the transition to a cashless society to be successful, Australia would need to:
In conclusion, I believe that cash no longer has the crown, but neither does digital money. So let’s say that we are transitioning between reigns.
Written for you by Keira Borg
The information contained on this website and in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website and in this article are of a general nature only and are based on our interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
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