Cash in the World
There are many indications that cash will be phased out in the next decade. Most major European countries are moving away from cash. Many have already capped cash transactions, such as a limit of €1000 in Italy and Portugal, and the number of cashless transactions in Europe is expected to reach 177 billion by the year 2020.
One of the reasons for this change is the innovations introduced with contactless payments, such as with the Oyster cards in London which commuters in London have been using for years to pay for travel. Nearly, one million people in London use their cards every day, saving them and the country as whole money and time. Before introducing this system, London was spending an average of £30 a year processing and protecting cash.
Sweden introduced the banknote in 1657, and it looks like it will be one of the first countries to do away with them. There are only about €8bn Swedish crowns in circulation and only half of them are in regular circulation. One of the main factors in their move to become one of the first cashless societies is their dependence on an app called Swish, which is a direct payment app used for instant transactions between individuals.
Reasons to go Cashless
There are many reasons that are motivating countries to do away with cash. There is a desire to make cross-country transactions easier, less expensive, and faster. It also costs a lot of money to protect and process cash. Also, notes have to be replaced as they wear out. There is also the problem of people hoarding large amounts of cash, reducing the government’s control over the economy. It has also proven to decrease bank robberies and tax evasion. After Sweden’s recent efforts to move away from cash, bank robberies in the country have hit an all-time low.
Concerns with going Cashless
There are downfalls to removing cash as well, such as the increase of online fraud, which innovators are working hard to counter. One of these is PayJunction, a credit card processing company. They developed a Smart Terminal that allows for digital signature capture. See here for more information. Tokenization, for example, has allowed for safe “one-click” ordering. At this point, there appear to be many benefits to a cashless society. But whether or not this will occur in the next decade, if at all, remains to be seen. Germany for one doesn’t seem to be heading in that direction as 80 percent of their transactions are through cash and only 33 percent of their citizens own a credit card.
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