Cashless Societies-Good For Some, Not So Good For Others

Cashless Societies

Cash is so overrated. Get rid of it. Cashless societies are getting pretty much to be the norm with countries like Sweden, Russia, India and others basically already there. A card swipe or a click of an app is all it takes to replace that icky paper money in your wallet/purse. Governments, central banks, credit card companies, etc ALL are in favor. Of course there are SOME detractors but…… what. Cashless is the new way. Oh yes, if you want to get rid of that icky paper stuff, contact the FintekNews money disposal group and send it on over.
(Bill Taylor/CEO)

“Do we need cash? Humans have used all sorts of things to exchange items of economic value — rare metals, strings of shells and even sunken boulders. Those objects have gotten more ephemeral, with paper money replacing most coins, and digital forms increasingly supplanting paper. Could physical cash go away entirely? Economists see great payoffs in a cashless society: lower transaction costs, new tools to manage economic growth and an end to tax evasion and money laundering. Critics see an end to privacy, frightening new powers for tyrants and costs that would fall disproportionately on the poor. The giant, if unintended, experiment that followed India’s attempt to withdraw 86 percent of cash in circulation showed one thing clearly: The end of cash is not likely to be a neat or simple process.

1. How much of money is cash?

Not that much, at least in terms of economic activity. According to the Switzerland-based Bank for International Settlements, there was a combined $4.54 trillion worth of cash circulating in the countries of the euro zone and 17 other major economies at the end of 2015. That accounted for only 8.9 percent of their combined gross domestic product, a figure that crept up about 70 basis points since 2011 because of more per-capita cash in the U.S. and euro zone. The U.S. had the most notes being used, at $1.42 trillion, but Japan had the highest banknotes-to-GDP ratio, at 19.4 percent. Of course, each dollar, yen, euro or kronor changes hands several times a year, creating a multiplier effect on the amount of money.

2. What would it mean to go cashless?

With a swipe of a card, a click of a mobile-phone app or an impress of your forefinger, you’d have instant access to your entire wealth. Invisible networks connecting banks, shops, governments and businesses would handle the flow of transactions, changing the face of banking forever. A glimpse of this future is already evident in India, where 255 million people use Paytm, a seven-year-old startup backed by China’s Alibaba Group Holding Ltd., to make payments through a virtual wallet….”

Full Story: Bloomberg