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Obstacles to a Cashless Society: A Three-Part Series, Part 3

In the first two installments of our series on Obstacles to a Cashless Society, we talked about concerns over technology reliability, security and privacy trust issues, as well as spotty mobile wallet acceptance and incompatibility issues. In this third and final installment, we cover how the worldwide cash vs. no-cash debate has (or hasn’t) been influenced by the modern global village, plus the enduring sway of individuality.

Cashless Obstacle: Individuality in the Global Village

The notion that the world has been shrunk by electronic media and the increased speed of communications is hardly new. In fact, the term “global village” has been with us since the 1960s. Since that time, given the rise of the Internet, there’s little argument that in today’s global village, physical distance has ceased being an impediment to people inclined to reach out beyond the local community to expand their social sphere.
More contentious though, is the topic of whether the connectivity of the global village is a stronger force for tranquility and uniformity or division and diversity. This same philosophical argument helps frame the overarching question of a cashless society: to be or not to be?

Cashless Obstacle: Geopolitical Individuality

From a pure technology standpoint, countries worldwide are becoming linked by cashless options such as Apple Pay, Samsung Pay and more. The opportunity for global conformity is increasingly becoming an option, but is it being exercised? As exemplified by a brief snapshot of a few countries, the global payments picture, for all its potential connectivity, remains stubbornly diverse – including in countries making a policy-based effort to go cashless.
  • United States: divided into multiple camps with every Next Big Thing portending the death of cash – but cash is still among the top payment methods.
  • Kenya: long without a highly developed banking and payments infrastructure in a pre-wireless and smartphone world, this country has been quick to experiment with mobile payments as a means of modernization.
  • United Kingdom: another house-divided situation, similar to the U.S. While contactless-cashless payments have been embraced and driven meaningful transaction volumes by London Underground passengers, Payments UK data continues to show cash is a leading form of both person-to-person and retail payments.
  • Germany: In early February 2016, the country’s finance ministry proposed the banning of cash transactions over €5,000 to combat money laundering and the financing of terrorism. But according to an article in The Guardian newspaper, a diverse alliance of political parties, as well as the country’s best-selling newspaper, mounted strong opposition to the proposals. Call it a misalignment between government and those they govern – a German people that are among the worldwide leaders in cash usage.
  • Denmark: still appears to be headed toward eliminating cash by 2030.
  • Sweden: a leader in terms of state-sponsored efforts to go cashless, in March 2016 the Swiss government was urged by its own national bank, Sveriges Riksbank, to make access to cash a legal right.
Human beings – if we are consistent, it is in our inconsistency. What we did yesterday is not the same as what we’ll do tomorrow. Case in point: a study done in 2014 by the Independent Community Bankers Association claimed that Millennials (18-34 year olds) in the U.S. were abandoning cash, citing a finding that about one in four of them carried less than $5 cash on them seven days a week.
However, earlier this year, two other studies generated this headline: “Cash is king even among Millennials.” In the first study, GoBankingRates.com found that 58 percent of the 1,000 Millennials surveyed prefer to use cash for paying and getting paid back by friends and family. The second study was released by Cardtronics in January 2016 and found that about 45 percent of Millennials report that they’re more likely to pay more with cash now than they did a few years ago.
In focusing on one demographic group in this instance, perhaps the observations shouldn’t be projected to all Americans. However, this seeming about-face by Millennials seems indicative of people in general not wanting to be typecast or be told how they’re supposed to act. As digital natives, perhaps Millennials were simply quick to realize that in a cashless society, we all lose the ability to choose – how we pay, how we protect our financial data and how we define ourselves as individuals.
Payment Types

Final Thoughts

A cashless society: to be or not to be? That is the question. And the answer is: not to be, not at any time soon anyway. The obstacles are many. Among them are not-ready-for-prime-time technology and old (payments) habits dying hard, as well as security/privacy trust issues and mobile wallet incompatibility.
More than all that though, the unlikelihood of a cashless society rests on the understanding that while our global village is defined by unprecedented connectivity, global diversity is alive and well because people value individuality and want the ability to choose, including how to pay.
Austrian economist Dr. Thorsten Polleit, commenting recently on efforts to limit cash payments, said this: “Banning cash is infringing on the freedom of citizens on a massive scale.”
While we at Cardtronics have a vested interest in healthy cash usage, that doesn’t diminish cash’s unique ability to enable financial inclusion, empowerment, privacy and security for people all throughout the global village. A healthy payments society is diverse, not cashless, and defined by the freedom to choose how to pay.
Tom Pierce
Chief Marketing Officer

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