Have you ever found money in the street? Something larger than a penny, like a pound, a five dollar bill, or a ten euro note? There’s no feeling quite like it. For most of us, physical money comes attached to a sense of possibility, even adventure. As kids, our grandparents slipped us pocket money when our parents weren’t looking, and even though we most likely wasted it on sweets, the feeling of holding real cash made us feel invincible - or at least my five-year-old self did.
For many people, money is symbolic of more than just currency. The Royal Mint sells silver pennies intended as good luck charms for babies, and in March this year, they released a limited edition 50p coin commemorating legendary theoretical physicist, Stephen Hawking.
But physical cash presents plenty of problems, too. It’s bulky, easy to forge, easy to steal, and plays host to a delightful variety of orifice-attacking illnesses, including Norovirus, MRSA, and Salmonella. It's also hard to track, which makes it an ideal vehicle for all kinds of illicit activities.
And so we have a debate on our hands. Should we actively try and move towards a cashless society? What would be the pros and cons of such a move? What would happen to historic institutions such as The Royal Mint? And what about the homeless and vulnerable?
Pros and Cons: an overview
Our list is by no means exhaustive, but here are some of the pros and cons associated with a cashless society.
The Pros of a cashless society 👍
- Reduction in fraud and tax evasion
- Ability to pay the exact amount every time
- Potential tool in the fight against modern slavery
- Easier to spend globally
- Convenience of having all of your money at hand, all the time
The Cons of a cashless society 👎
- Inability to give change to the homeless
- Older generations might struggle with unfamiliar technology
- Complete reliance on technology and the internet
- Increased risk of cyber attacks
- Greater risk of overspending
Pro: Reduction in fraud and tax evasion 👍
Cash is anonymous, you can spend it almost anywhere, and it’s really easy to store in say, a shoe box. Receive enough cash from doing work —legit or otherwise— and fail to declare it, and you’re entering tax evasion territory.
Of course, financial fraud and tax evasion exists in digital finance, but so much of organised crime relies on physical cash, because it’s near-impossible to track. Some experts have suggested that removing large denomination bills from circulation (£50 notes in the UK, $100 bills in the U.S.) would go a surprisingly long way towards tackling fraud and tax evasion. This is because most regular people (i.e. not mob bosses) only use cash to pay for relatively little things — we use fives, tens, twenties. Compare this to the world of organised crime, where it’s preferable to do deals using large denomination bills.
Con: Inability to give to the homeless 👎
We asked around the Revolut office before writing this piece, and one of the things that came up time and again, was that without cash, how would we spare some change for the homeless and vulnerable?
The big picture answer is to donate to an official homelessness charity, or to give food, water and clothing instead. That said, homeless people still need to buy things just like anyone else, and not having access to a bank account, on top of there being no cash, could be a potential disaster.
Pro: Ability to pay the exact amount every time 👍
Unless you love counting out coins, then carrying around the change in your pockets all day, being able to pay the exact amount for something seems like a great idea. After all, we’ve been using money for long enough that we shouldn’t have to think about bringing the right amount for the things that we want, right?
Or maybe not. Maybe you love collecting the change in a little jar, then using it to treat yo’self.
Con: Older generations may struggle with unfamiliar technology 👎
According to a survey reported in the Guardian, around 74% of those aged over 55, never use mobile banking apps. That figure is around 57% for low-income earners across all age groups.
Perhaps what this illustrates is that while going cashless might seem perfectly natural and reasonable to those of us who are familiar with fintech, there are still millions who might struggle. It’s something that all fintech startups, Revolut included, need to think about when scaling. How do we make our products more inclusive? More intuitive? More user-friendly for everyone?
Pro: Potential tool in the fight against modern slavery 👍
Modern slavery is one of the most pressing, and often difficult to spot challenges facing the world today. Cash is one small part of the equation, but the ecosystem that exists around modern slavery relies heavily on physical cash and backhand payments.
By removing physical cash from that equation, it could make it more difficult for perpetrators of modern slavery to operate under the radar.
Con: Complete reliance on technology and the internet 👎
Digital payments just don’t work without the internet. For all of the pros raised around a cashless society, perhaps the biggest con is that without cash, we would be completely reliant on continuously functioning tech, and a stable internet connection.
Can anyone say, 'Coronal Mass Ejection'?
Pro: Easier to spend globally 👍
Obviously, this is a huge pro, and one of the main reasons why Revolut exists. Being able to spend in the local currency, and to exchange currency at the best rates, without having to wait in line at an exchange counter, means more time spent on doing the things you love — unless waiting in line for currency exchanges is what you love to do, and in which case, might we suggest knitting, or table tennis?
Con: Increased risk of cyber attacks 👎
Without cash to defraud, criminals would have no choice —assuming they didn’t want to become law abiding citizens— but to turn to cyber crime.
Cyber criminals are not the cheeky little urchins who steal from the sweet shop, either. They’re highly organised, devious and ruthless criminals, whose goal is to steal your money either without you noticing, or under the guise of something legitimate.
Revolut has an entire team dedicated to staying one step ahead of the criminals, and we’ve written about some of the things that we do on the blog recently.
Pro: Convenience of having all of your money, all the time 👍
Carrying around all of your money all the time would suck. You’d need a plain black briefcase, probably some sort of safe, and maybe an unmarked rucksack, as well. You’d leave it on the train, get your unmarked rucksack mixed up with someone else’s… no, complete nightmare.
One huge pro of a cashless society is the ability to carry all of your money with you at all times, wherever you go. Think about that for a second. Think of being anywhere in the world, and suddenly deciding that you wanted to start a new life. Maybe you should think more carefully about it, but with all of your money right there in your pocket —and between some low Earth orbit satellites— the world is your oyster.
Con: Increased risk of overspending 👎
This last one is kind of subjective, but without cash, some of us may be prone to spending more than we would like to. After all, it’s very easy to tap your card to a reader and walk away, but if you have to physically count out the cash for each and every purchase, would it change the way that you spend?
Share your thoughts 🤔
Is a cashless society a good idea or not? Is it a grey area? Are there too many pros and cons to make a decision? Let us know your thoughts on a world where you actually have to read your birthday cards, because there’s nothing else inside.
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