All transactions are traceable
Of course, there are those people who will claim that this is, in fact, a disadvantage – i.e. they can be tracked at all times by government agencies, and they may have a point to some extent. However, the reality is that without traceable records, cash has been a major facilitator of illegal transactions and organised crime. Now that every payment can be followed, it is much more difficult to conduct illegal activities and make questionable transactions, which can only be good for society as a whole.
Cashless systems are convenient
The convenience of cashless systems is there to behold. From just one simple tap of a debit card or cell phone, the transaction can be made and recorded, and referred to at any stage. In some ways, the true convenience of cashless systems can be seen through the prism of the inconvenience of cash. With cash, you have to physically have it on your person at all times. Sure, this is true of a debit card or mobile phone too, but these objects are not handed over and so remain intact (granted, your phone could run out of battery). Cash runs out, and then you seek more. Cash can also be lost, and then not replaced. And then of course, when visiting another country, you need to exchange your cash into the local currency. All of these elements add up to an inconvenient system that was ripe to be replaced.
Many people are averse to change and will continue to sing the benefits of cash, especially older people, and so we need to be careful about how quickly we phase out cash altogether, but the reality is that there are very few drawbacks to cashless systems in comparison, especially when considering convenience.
Cashless systems can be more secure
Yes, cybercrime is a reality and many people fear theft from online accounts, and are vigilant with passwords and regular checking of the account to look for suspicious transactions. These are all good habits and should not be changed. But the reality is that a cashless system is considerably securer than cash. Cash can be stolen or lost, and in most cases, not replaced. Yes, it is possible that fraudulent activities can occur with your online bank account, for example, but in these cases, the activity is much easier to monitor and block in a timely fashion. And now with the increasing prevalence of security systems using voice and face recognition, for example, security will only get better.
Cashless systems can facilitate alternative types of currency
We have all heard of cryptocurrencies, for example, but there are other types of online currencies that are springing up and offering unusual benefits. For example, in the city of Volos in Greece, a currency has been brought into usage (called TEM) that can only be spent locally and cannot be hoarded (there is a limit as to how much each individual can hold at any one time) as well as how much any one person can be in debt. This stimulates the local economy and, at the same time, seeks to prevent so many of the bad habits that have brought about such inequality in our cash-based society.
Cashless systems can promote more effective monetary policies
Without getting too technical, a cashless society would enable governments more control in an economic downturn due to the fact that people are less able to sit on their money as they would be able to with cash. In this way, governments can leverage the money which constantly exists in the system – there are no ‘withdrawals’ after all – through an approach such as a negative interest rate, which would ultimately lead to increased lending and numbers and sizes of investments, which gets the economy up and running again.
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