Obstacles to a Cashless Society: A Three-Part Series


[Editor’s Note: This is the first installment in a three-part series on Obstacles to a Cashless Society)
Cash is a leading form of payment. That’s not opinion, that’s a fact. What is opinion is the future of cash – some of those “in the know” predict that the use of cash will decrease significantly around the world in time frames ranging from 2020 to 2050. Cards, smartphones, and other mobile payment systems will be taking over, and digital currency such as bitcoins will become accepted around the world. At the extreme end of this viewpoint, some pundits excitedly predict it will take less than 10 years for cash to disappear as a form of payment.
However, more moderate thinkers believe it will take much longer for the cashless society to develop, if ever. When asked in a January 2016 media interview about the digitization of cash, Cardtronics North American President David Dove, said, “If I roll the clock forward 100 years, will cash still be here? I don’t know. But I’m pretty confident in saying the disappearance of cash won’t happen in my lifetime – and I don’t think in my daughter’s lifetime.”
World's differnt cash types
His opinion is not based on wishful thinking or the fact that he works for the world’s largest ATM owner/operator. It is instead based on the real-world existence of major obstacles that are slowing, if not stopping outright, the arrival of the cashless society.
These obstacles include:
  • The questionable reliability of digital payment tools, and habitual human behavior challenges – discussed below
  • Trust issues around security and privacy, and the questions around which mobile wallet works where – covered in part two of this series
  • Differences within the global village, and the societal tendency toward individuality – covered in part three of the series

Cashless Obstacle: Unreliable Technology

First, newer technology such as that supporting mobile wallets is not widely trusted. Digital Transactions reported on a Bankrate.com study for the 2015 holiday shopping season that found that 84 percent of those surveyed who had Internet access on their phone did not plan on using a mobile wallet. The top reason? Fears about security.

Cash: Always On, Always Works

The blogger of a July 2015 article on the BBC’s “Future” website put it this way, “If the power goes out, or there’s a blip in the electronic systems that make the online commerce world go round, cash is there.” And in an August 2015 The Telegraph column, financial columnist Matthew Lynn wrote, “No matter how smart our mobiles get, or how much data can be loaded onto a debit card, a banknote is...costless, immediate, flexible, no one ever needs a password, it can’t be hacked, and the system doesn’t ever crash.”

Cashless Obstacle: Creatures of Habit (we are)

Old habits die hard and that’s probably truer with cash than with anything else. It’s been around for centuries. It’s anonymous, fast and keeps its owner to a budget
“Making the change to a completely cashless society will mean overturning tradition, which may be a bigger hurdle than technology,” Peter Hahn, a senior lecturer in corporate finance at London’s Cass Business School, said in a 2015 CNBC special report.
Unless newer payment technologies such as mobile payments or digital wallets become systematic, routine and dependable, consumers will continue to use cash, debit and credit cards as their top forms of payment.
A cashless society demands standardized technology and protection from government intrusion. Can it deliver? Watch for the second installment in our series on Obstacles to a Cashless Society, set to appear Thursday, May 5.
Tom Pierce
Chief Marketing Officer

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