If you are tired of physically carrying your cash around, the idea of a cashless society may seem appealing. But, not surprisingly, Pew Research shows that 29% of Americans already make no purchases using cash in a typical week, preferring to swipe a debit or credit card instead.
Moreover, in the wake of COVID-19, many stores refused to take cash, saying it was safer for their cashiers. European countries like Switzerland, Norway, the Netherlands, Finland, Denmark, and the UK are way ahead in becoming cashless since 99% of payments get made with debit cards.
Sweden created a cashless payment app called the Swish, and only about 9% of its citizens pay in cash today, mostly the elderly. The country is also piloting a central bank digital currency known as the E-Korona.
Pros and Cons of Stopping the Use of Cash
Many think the pandemic brought on a decrease in cash, but the trend started much earlier. Cashless means more than convenience; it also helps lessen fraud and fight money laundering since it’s easy to track electronic transactions.
A major pro of a cashless society is cost savings since banknotes and coin manufacturing will cease. Furthermore, savings increase because the cash does not need storage or transportation for withdrawals and deposits. People stop using money because they want convenience and a seamless experience. They achieve this by using cards (debit or credit), eWallets, and even cryptocurrencies.
People traveling across borders prefer using no cash since they don’t need to exchange their cash for domestic currency. Instead, they use their smart cards to pay, converting the transaction to the local currency.
Despite the pros, cashless also has some cons. One of the most significant is the incapability of most people to maintain as strict a budget as cash since consumers lose track of spending. As a result, people also complain that they save less.
Another disadvantage of paying with a digital payment system is the reliance on the Internet and the chances of technical glitches disrupting transactions. When a system goes down, how can people access their money until restored, never mind the problem with hackers and putting their data out there?
Finally, a cashless society can lead to the exclusion of some people, particularly the most vulnerable and the elderly, who cannot access systems due to their immigration status, financial situation, or living in remote regions.
Preparing to Stop Using Cash in 2022
Inevitably, most of us have already reduced our cash usage, so here is how you can prepare to go cash-free.
1. Stay Ahead By Keeping Physical Records Money
Electronic records mean that you won’t have paper evidence of your accounts. Hacking remains one of the most severe threats to your money in a cashless society. Keep printed copies of your assets, including cryptos, in case of a hack or technology fallout.
2. Get a Bank Account
When you open a checking account, you will have access to a debit card and other banking services that are easy to manage online, allowing you to perform seamless transactions. Money orders can help you pay for regular expenses like utilities, and cards make it easy to settle accounts everywhere, especially in stores that don’t accept cash. Online banking services are also cheaper than paying in cash.
3. Learn How to Manage Your Banking Online
Once you open your bank account, download the banking app on your smartphone and familiarize yourself with the bank’s products. Learn how to read your messages, approve transactions, create money orders, request cards, cancel cards, etc. These banking apps make every aspect of managing your money much faster and more straightforward.
4. Learn About Budgeting Without Cash
Consumers prefer a cash-based system because they feel it’s easier to budget. However, you can find ways to budget on a system where you use no cash. For example, some eWallets allow you to set money aside for specific expenses, or you can create an electronic budgeting system to make it easy to track your spending.
5. Prepare to Receive Cashless Payments
Finally, if you are the owner of a small enterprise or a freelancer with no way of accepting non-cash payments, then now is the time to prepare. POS machines that link up to your smartphone make it easy to get paid with any card type. Yes, these transactions have some fees, but think of how you can save money by linking transactions to your accounting system. Additionally, think of all the added customers you can attract to your business who would not support you if you didn’t accept cashless payments.
For some people, cash remains king, especially the elderly who have not learned to use the Internet or live in rural areas where access is inconsistent. However, if you want to stop using cash in 2022, it is far easier to go cashless than you thought.