Obstacles to a Cashless Society: A Three-Part Series, Part 2

In the first installment of our series on Obstacles to a Cashless Society, we introduced potentially unmovable roadblocks to the elimination of cash – “technology reliability” and “old habits dying hard.” This installment continues to focus on technology concerns, shifting our attention to privacy and standardization problems.

Cashless Obstacle: Technology Security & Privacy Trust Issues

As we discussed in our first installment, payments technology trust issues on the part of consumers go deep, tapping into data security fears. And many technology experts agree with them. An August 2015 survey of IT governance professionals found that 87 percent expect an increase in mobile payment data breaches over the next 12 months. That same survey found that 89 percent of respondents consider cash the most secure payment method.
And at least one country that’s on the road to cashlessness has seen an increase in illegal activity related to electronic purchases. The Independent newspaper in the U.K. reported in 2015 that, “In Sweden, where four of five purchases are made electronically (either by debit or credit), cases of fraud have doubled in the past 10 years.”
Even those who espouse moving to a cashless society are concerned about security and privacy. “We need to be wary of this type of cashless future, especially at this point in history where security and privacy architecture around online payments is completely inadequate,” a January 2016 Bloomberg View op-ed said. Furthermore, it cautioned that, “…you don’t have to be paranoid to worry about Big Brother tracking your financial life.”
People are beginning to realize that digitization of money means how they spend money, and what they buy, becomes data stored on someone else’s’ computer – a permanent record of their purchasing habits.
Inherent in the fear of invasion of privacy is the concern of government intrusion – a fear that runs deep and not only among conspiracy theorists. A 2013 CNBC blog post cautioned against a cashless society, saying that a society based solely on digital payments will allow governments to target individuals with whom they disagree and close down withdrawals or payments from those individuals’ bank accounts with just a few keystrokes.

Cashless Obstacle: Is My Mobile Wallet Accepted Here?

Currently, the non-uniform nature of payment technology has kept many retailers from adopting any mobile payment technology at all. Consumers can’t count on using their mobile phone for payment, because they don’t know what system, if any, they will be able to access – or even if they have the right phone for the job. “While Apple, Google, and Samsung (to name a few) have wallet apps – not all consumers have devices capable of supporting the payment technology needed to use these in store,” GFK, a global market and consumer research firm, said in a 2015 blog post.
Given this lack of cross compatibility between mobile payments vendors and the absence of a common infrastructure for financial institutions, Nicolas Christin, a Carnegie Mellon University researcher, was quoted in a BBC Future article as saying, “all make progress away from cash more of a slog than a sprint.”
Perhaps someday consumers can set aside their trust issues. Perhaps the technology platform supporting digitized payments will be more standardized and less of a roadblock to the cashless society. However, there are other obstacles, such as individuality, that stand in the way of a cashless society, even in today’s global village. We’ll discuss those on May 9 in our third and final installment of Obstacles to a Cashless Society.
Tom Pierce
Chief Marketing Officer

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