Is America hesitant to move towards a Cashless Society?
Cashless Transactions are slowly increasing day-by-day and there is no doubt that the world is inching towards it. Credit Cards,Debit Cards and other evolution in technology has replaced paper money to some extent. But, this transition happened only recently as many apps and mobile payment platforms are on the rise. However,Cash continues to be the major commodity in majority of the countries.
Gradual Changeover from Cash to Cashless
Paper money came into existence on the 16th Century and has remained in the market till now. From then on, only the economic policies,trends,and trade patterns have changed, but not paper currency. The shift in the market when it comes to mode of transactions is mainly because of technology.
But,Human beings do not gladly receive any innovation just for the sake of growth. Convenience is the major reason why people accept technological progress. Many consider Lisri this reason to be the prime factor in this gradual changeover.
Countries like Denmark,Sweden and Norway are leading the global trend towards electronic money. It is an irony that America, which has been the forerunner to all countries when it comes to progress and development, is reluctant to undergo this move.
So What’s holding back the US
According to an experienced cross-cultural sociologist, the Americans do not trust their Government like the Swedes do. Sweden and Denmark are considered to be the least corrupt countries in the world. This is mainly because of the manner in which the machinery of their government functions.
But in the United States of America, the scenario is slightly different. They don’t adopt the Nordic model like Sweden or Denmark and have their own system in place. For some reason,this structure is not trusted by the Americans and they are afraid about the state of their money once its digitized.
In the last 50 years Americans’ faith in their government has gone down extensively. There are a number of reasons behind this mindset of the people.A survey,reveals that a majority of the people are worried about Online Privacy when doing Online Banking. They are aware that their information could be misused.
In spite of all these factors, Cash is slowly fading away from US Circulation. A senior Harvard economist believes that it’s only a matter of time before a cashless website economy would come in. Large bills are also perceived to be a negative as it might contribute to any illegal activity in the underground economy. Getting rid of those would eventually lead more people to cashless transactions.
Present State of The American Mindset
There has been an unprecedented rise on the usage of mobile payments in America and it is a clear indication of how the cashless transactions are on the rise. Statistics also show that more than than 72 percentage of Americans possesses Credit Cards/Debit Cards. A cashless future is not possible imminently but, these numbers give a clear and solid report.
Though a major community in the United States desires to use cash,the number of Card holders are always on the increase. America ranks seventh in the list of countries that has more card users. So it could potentially turn out to be a nation where digitized transaction would replace paper cash.
In the US,apps like Venmo has played a vital role in moving the country towards a cashless economy. Venmo has added features that make the User feel like being on a Social Network.These apps target the young people as they are more open to the idea of a cashless future.
Most of the youngsters prefer the idea of using a Card to having cash with them.This vividly highlights the direction in which the Country is moving as its future revolves around this age group.
People in America have started to use cards even to meet their basic needs.Furthermore,there is a 7 percentage increase from 2011 in the number of people who make cashless transactions. This is also due to the extensive use of Smart phones and improvement of mobile technology like Venmo and Apple Pay.
The US may not become like Sweden in the next 5 years as it is more diverse. Many Indians,Africans,Hispanics and Mexicans live in the US and it is 33 times larger than Sweden. But this National phenomenon is steadily gaining momentum in many parts of the US. Most of the Americans believe that their Country would go cashless in the next 20 years.
Challenges to a Cashless Society in the United States
In US,there is still a long way to go to have a complete cashless economic setup in place. Globalisation has directly or indirectly connected the economic welfare of all the Countries. So,a cashless society is possible only when all the Countries are striving together to attain it. Otherwise this system could turn out to be a hazardous one.
To achieve a cashless economy,a country needs a right infrastructure.Digital transaction or digital banking requires people to possess smartphones,credit cards,Debit Cards and access to internet connection and that is not possible for all the people. Even in United States, which is considered to be a developed country, there are still people who are deprived of having all these basic amenities.
Meanwhile,there are still millions of people in the US without bank accounts and that is a big number. There is also a perception that a cashless system completely eliminates the poor and the illiterate people. To have an effective economy a System has to somehow include this category of people as well.
Besides,hackers have repeatedly broken into retailers’ payment systems and has stolen millions.So proper security enforcements must be regulated to control the activity of these hackers. Personal transaction details and incomes can be accessed by legal authorities like the Tax Officials and the Police.
In the US more than the Government,it is the private sector banks and payment service providers that are interested in bringing in a cashless society. These commercial banks do not provide sufficient safety mechanisms to confront a crisis situation . In case of any natural disasters, the system could break down completely and leave the nation in a mess.
Advantages of going Cashless
Digital transactions bring in better transparency and there is less scope for corruption. It is very easy for the government to document each and every transaction and this system would also allow them to have a strong control of money supply. Apart from that, it is time saving as money transfer between accounts takes only a few minutes when compared with the other methods which may take several days.
Besides that,there is a heavy flow of cash between terrorist Organizations in different countries and that can be curbed to a greater extent.Cash is made from paper and to print those,a large number of trees had to be cut down.This action can be prevented by adopting a cashless system, thereby saving the environment.
Evidently,America is moving towards a cashless society. But it is not possible in the near future as various elements have to fall into place for that to occur.There are many merits and demerits in a cashless society.The world is getting ready to embrace the cashless system, but only time will tell whether it is going to be a smooth progression or not.