Hmmm … Cashless Society eh!
Today I’m going to bring up a subject that will provoke you or at least provoke some thought:
Should we as a society even think about moving toward being completely cashless?
In 2015, the Apple Watch will likely prompt millions of consumers to stop digging into their pockets for their cell phone and possibly ditch their wallets.
Many economists are arguing that governments should consider doing something similar.
The movement for a cashless society has been gaining momentum over the past decade or so, but now it is technologically possible.
Still, getting a country of 315 million people to throw away their pennies and dollars and instead embrace digital wallets would require political will and public education on a mass scale. That makes going digital unlikely in the short term in the U.S.
Too bad since there are some very good reasons to dump greenbacks and coin. Here are a few reasons to ponder on;
1. Would it be more efficient?
As The Economist recently noted, consumers spend six hours a year looking for an ATM. The Transportation Safety Authority also reported that consumers left $531,395.22 behind in change in airport checkpoints.
2. Would it help reduce crime?
Criminals love cash because it’s very hard to trace. Eliminating this option would prompt all transactions to be recorded.
It would also prevent bank robberies. As the F.B.I. points out, even in this high tech age, bank robberies accounted for $30 million in theft in 2011, a figure that doesn’t include insurance fees or the 100 deaths or injuries that were related to those robberies that year.
It might also put a dent in tax evasion, which has costs governments across the world as much as $3.1 trillion annually, according to one estimate.
3.Would it be Cheaper?
In 2012, it costs double the price of a penny and a nickel, respectively, to produce each. It would be cheaper to shut down the U.S. mints and produce nothing.
4. Would it lead to a negative interest rate?
As The Economist explains, with physical cash, there can never be negative interest rates because consumers can always withdraw money and keep it under their mattresses. Below-zero interest rates could conceivably draw investment and boost the economy.
5. It would definitely lead to less hand washing, money is really dirty!!
Money is teeming with bacteria related to pneumonia, food poisoning, gastric ulcers and staph infections, according to a recent study by NYU’s Center for Genomics and Systems Biology.
Of course, there are many legitimate objections to this idea.
- Consumers should be allowed to make anonymous purchases if they wish
- Not everyone has access to broadband and can afford it.
- An electronic currency would be vulnerable to power outages, among other threats.
That hasn’t stopped some countries from plowing ahead anyway. In Sweden, for instance, only 3% of transactions today are made with actual cash.
What do you think? Did this prompt some thought? What are some downfalls? Any better ideas? Agree – Disagree?
Please weigh in, in the comments section below. I’d really like to know your ideas and thoughts.
More later……………………. !