Exploring the growing list of countries that indicate…
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More than 3000 years ago, the world’s first recognizable coins were produced in China. Fast forward to the present day and we can see that the market size of China’s digital economy ranks second in the world behind the United States, according to a white paper published by the Chinese Academy of Information Technology. information and communications. This explains why if you were to visit modern China, you would most likely see people paying using facial recognition on their smartphones.
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Not surprisingly, this is common practice around the world, with the global shift to e-commerce – digital payment solutions are the way of the future. This radical payment change should only be the beginning of this monetary revolution.
Between digitization and environmental impacts, physical coins and paper money have seen a drop in demand. It seems that cash is no longer king. The shift in our global payments ecosystem, which includes both physical cash and mobile wallets, can be attributed to the merger of three powerful industries: telecommunications, retail, and banking. This means that if we see joint collaboration between the private and public sectors to use the latest technologies, we will realize the full capabilities of a cashless society.
While some countries struggle to adapt to new technologies, others are well on their way to completing digitalization. In this article, we will explore the fundamentals of a cashless society and the pioneer countries of this financial migration.
Contents Pin up
1. Are cashless societies the future?
2. Benefits of a cashless society
3. Which countries are making the switch?
4. Will physical money become obsolete?
5. Final Thoughts
Are cashless societies the future?
According to forecasts, the future of finance will be “a digital paradise”. Living in a world in which all financial transactions are carried out by purely non-analog means – an absolute cashless society.
Anne Boden, Founder and Managing Director of Starling Bank, is quoted as saying that “Since the advent of the internet, digital payments have been virtually inevitable. From the introduction of the Bankers’ Automated Clearing System (Bacs) in the 1960s until today, digital payments have grown while the use of cash has declined. In the space of a few decades, digital payments have gone from a rarity to common practice. In fact, for many, the question is no longer whether we should use digital payments, but rather how to make payments faster, better and safer.
The benefits of a cashless society
For those who are tech-savvy (at least to some degree), digital payment means simplicity and convenience. The ease of simply sending a P2P payment or tapping your phone significantly outweighs having to wait in line at an ATM or worrying about whether you have enough money. Digital transactions also leave less room for error, since the exact amount can be paid without the need for change. The cost of making cash is high, handling cash is even higher. Reducing money production also has significant environmental benefits. According to the American Council of Science and Health, the mining and transportation of coins resulted in the emission of more than 48,000 tons of carbon dioxide.
The World Economic Forum has reported that “cashless technologies could be one of our greatest assets in the fight against corruption and organized crime… Any money that appears outside of this framework could be immediately reported and made the subject of an investigation. This would reduce the attention of law enforcement and forensic accountants, making it easier to target and recover hidden money.
Which countries are making the switch?
The migration to an all-digital financial structure has shown a strong reliance on a country’s ability to keep up with and invent new technological advancements. That’s why it’s no surprise that the top contenders for cashless countries are also tech leaders in their own right.
Sweden, the Netherlands, China, the United Kingdom and South Korea are among the countries closest to achieving a nearly cashless society. Sweden is actually expected to reach that milestone as early as 2023. If we look at the Pound against the Quid in Sweden, there are reports that UK banks may be forced to save money for the elderly, following the pattern Swedish.
Will physical money become obsolete?
Christine Lagarde, President of the European Central Bank believes that the answer to this question is no, in an interview she said that “there are countries that are very close to cashless situations. If you look at countries like Sweden and, to a lesser extent, the Netherlands, a lot of transactions are cashless. But it’s not necessarily to the advantage, to the benefit of everyone. You have elderly people in particular who don’t have no interest in having digital currencies and who still want to work with cash. That’s fine, it should be available. People should have a choice.”
While a cashless society seems like the ideal option for convenience and security, its dependence weighs heavily on a population’s access to the appropriate technology as well as the ability to grasp the knowledge needed to use it. . This means that cash is a valuable part of most societies today, but our reliance on physical currency is drastically diminishing.
If we look at how far we have come, the progress shows that a completely cashless global society is extremely likely, if not inevitable. However, for now, it looks like cash definitely has a place in today’s society. But as countries become more technologically savvy, the size of this space will shrink.
Updated on January 14, 2022 at 4:29 p.m.
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