Should We Fear A Cashless Society?
Digital payments promise speed and convenience, but should societies abandon cash altogether?
Although a cashless society boosts the velocity of monetary flow, a completely digital framework is susceptible to the risk of infringing personal rights of the citizens, economic exclusion, and ecosystemic agility.
A cashless economy introduces various vulnerabilities due to infrastructural unpredictability which basically paralyzes local commerce. Many countries have incorporated digital mediums of exchange in their daily life instead of using tangible cash.
There has been a significant shift in the mediums of exchange due efficiency of physical payments which have been popularized since the late 1990s. Digital use for making payments has not been only popularized due to efficiency but also due to effective prohibition of evasion of taxes.
Some economists, like Kenneth Rogoff, think that paper money is old-fashioned and not needed in economies…. Even though digital payments are convenient, we should not get rid of cash completely.
Cash is still very important for the inclusion of various societal groups in the economy, which also plays a major part in crises. The key example is the Sweden’s U turn case where the government itself cited for people to keep cash at home in state of national emergencies due to unpredictable nature of digital infrastructure which is vulnerable to cyberwarfare.
A cashless society makes economies weaker during emergencies. Digital payment systems need electricity, internet, and good banking infrastructure to operate efficiently.
This shows that the more we rely on such vulnerable systems, the more problems we have to possess if they fail. Cash does not only have economic benefits but also moral ones which contribute as a whole to not only societies but also economies.
Eliminating cash breaks the thread of common acts of charity between the people as in a society where cash is primarily used; some acts continue like tipping a street performer or helping a needy person in need of money using gold or silver coins which basically proves the tangible nature of cash.
A cashless society restricts such acts of kindness because backward societies have not yet digitalized. This erodes goodwill among people.
One big problem with a cashless society is that some parts of society get left out which makes them more prone to vulnerabilities due to lack of digitalization of backward societies.
There are people around the world who do not have good access to banking or the internet. These people rely on cash to buy things. Elderly and those who live in areas may also have trouble using complex digital systems.
While digital payments are efficient for people, they should not make it hard for others to participate in the economy. Theeconomy should be for everyone, not those who can effectively navigate and utilize digital software. Cash is still important because it lets people buy commodities regardless of the circumstances.
Locke’s concept of “spoilage” from his second treatises of government also states that the humans have as much right to their property till it’s used before it spoils.
To overcome this limitation, the people agreed for cash to be a common medium of exchange like silver and gold coins. A cashless society completely flips the concept.
In a completely digital economy, people don’t use the tangible medium of exchange. Instead, wealth is looked upon and handled by the institutions which basically contradict Locke’s view of money.
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Another quandary that arises with a digital economy is the constraint on freedom of choice of people. John Locke also believed that a just society is built on agreements.
However, citizens are restricted from directly trading with one another. The citizens are compelled to contact commercial institutions which charge fees to access their own wealth. Thus, such systems basically restrict the freedom of individuals.
Dematerializing currency can give governments and financial institutions much power over people. When we make use of cash, we can exchange money privately without needing a bank because digital payment is basically a gateway that establishments use to track and control every transaction.
This is a problem because it can infringe on the privacy and freedom of individuals of the economy. John Locke believed that our property and freedom are closely connected. While digital systems can reduce crime and tax evasion, they can also reduce our privacy as they basically confine the wealth of the common people under fee. Thus, giving institutions too much control over our money.
The banking sector in India has come a long way, but there are still things which need more attention for a more secure cashless system. Websites and banking apps crashing and UPI servers failing are something which can handicap a person in time of need if we are to completely depend on cashless systems.
Data privacy is also a concern; data leaks or insider misuse can be extremely dangerous in situations like this. In a country like India, we can notice that there are weaker urban banks and small cooperatives; these lack governance and can also pose a risk like fraud and liquidity crises as noticed in the past.
With these concerns, there are still good arguments for a cashless society. Digital payments are fast and efficient. Businesses and people can make transactions quickly without needing to handle cash.
In India the Unified Payments Interface has made it easy for people to make transactions quickly and cheaply. Digital systems can also help governments save big sums of money which had been extensively used due to the expense of handling cash infrastructure.
Thus, preserved funds can be employed for the betterment of society and its people further.
Despite its many flaws, the Unified Payments Interface in India has helped the e- commerce giant. As most of us have noticed the rise of e-commerce platforms in our daily lives, we have also seen its environmental implications.
Prepayment of orders using services such as UPI leads to fewer returns and failed deliveries as consumers are more committed to receiving the orders. Which helps reduce packaging waste as customers are less likely to impulse order or refuse order on delivery as it is prepaid resulting in better functioning of e-commerce platforms.
Supporters of payments also say that there can be an increase in the velocity of money in the economy. This means that money can circulate between people and businesses.
However, just because transactions are swifter does not directly indicate towards an egalitarian society because there still exists societal exclusions. Thus, relying too much on technology can still cause big problems.
If economies drift away completely from cash, then it could be a danger for the people psychologically. The people have a pinch of pain when they part with physical cash, which is also termed as “pain of paying” by many economists.
When money just remains digital and easy to access, the people also start buying and selling commodities impulsively. Such a system that creates the partition of wealth from the people that easily does not protect the property rather it creates instances such as debt slavery.
Therefore, for an economy to shift to a fully cashless society or be more dependent on online systems cybercrime needs to be taken more critically and solutions should be implemented quickly and systematic problems must be handled by skilled individuals;trust has to be nested within the people; Government should bring forward schemes to properly educate the elderly and children; social media platforms shall be used to full advantage to educate people as well as prevent the spread of misinformation.
In the end, the debate about a cashless society is not about efficiency but also about what we value. Digital systems are convenient and modern. We should keep using new technology… Getting rid of cash completely can make our economy weaker, reduce our financial privacy, and exclude some people from participating in society.
As John Locke said, money is based on trust. The question is, should we put all our trust in institutions? Maybe the best economy is one that balances progress with cash so we can have freedom, accessibility, and resilience.
