The risks to society in a move towards a cashless world

In this blog we will be discussing whether a push towards a cashless society is what Europe really needs right now.

The COVID19 pandemic has radically changed the way we live and made us reassess what we previously considered important. In fact, we actually need very little to survive, both as individuals and as a global society.

Governments across the world have told people to work remotely or stop working entirely and minus the few sectors deemed ‘essential’, Europe and the world have closed their doors, borders and businesses to ensure our safety. 

How will this impact everyday lives?

So as we begin to look to a new normal, what is needed to kick start the local businesses and economies? What’s considered essential?

Normally in instances such as these, it’s not unusual to see businesses rise from the ashes. Innovative business owners will have adapted to the current situation and made changes to provide essential services. (This includes the financial industry, especially with the launches of new digital payment platforms.)

But, are we missing a trick? Is the payments industry going to morph into something that might be too digitally enhanced, impacting millions of people that deem cash essential in their everyday lives?

As the world continues to debate on their preferred payment choice… all that matters is how it’s used. Many people still need to pay their mortgages, rent, bills, pay for goods and services and most importantly, get paid!

So with this in mind, the question still stands… are the payments industry considering every single member of society when they’re developing the world into one big cashless society?

Expressing concerns across Europe

Central European bankers have expressed concerns that reducing payment options will impact the hidden customer and it is their responsibility to ensure that the choice remains at the forefront of any payment developments, allowing access for all.

This 2019 study by the European Central Bank shows that whilst almost 80 percent of all payments are still done in cash in the Eurozone, countries like Estonia, the Netherlands and Finland are already using electronic payments for about half of all their transactions.

“We’re under attack every day. If you don’t have your shields up, you notice activity straight away,” said Petra Hielkema, Director of payments at the Dutch Central Bank. “Cash provides trust, and we see a lot of people who really need it.”

Ewald Nowotny, Governor of the Austrian National Bank, stated at a 2019 conference in Brussels, “Increasingly, central banks insist that cash will still play a role. We do not foresee a totally cashless society. If there is for instance an energy blackout, cash is the only surviving way of payment.” [Quoted by Politico]

Cash is essential for daily life

For many, cash is essential for daily life and at a time where banks are closing temporarily, ATMs have been providing a lifeline to local communities across Europe with convenient access to cash.

Consequently, the decline of cash access, risks creating ‘cash deserts’ in areas that need it most. In a recent report from the Access to Cash Review, it stressed concerns that a move to a cashless society would leave almost one in five (17%) of the UK population struggling to cope.

With the support of many banks worldwide, Euronet is committed to empowering payment inclusion among all consumers, with both cash and digital payment options. Having a choice in how we pay for our goods and services will not only encourage enterprise, economic growth and stability, but we must also remember that as we move more into a digital world, cash still plays a vital role in many people’s lives and they need to, and must be considered.

And finally – in a report from the European Payments Council, they offer up that “Most of the time, cash is universal, ubiquitous, and untraceable, therefore it makes people have a sense of security. Not having cash may cause people to feel vulnerable, especially during a crisis. Therefore, the cashless society dream does not seem, at the moment, very feasible.”

If you’re at all concerned about the spread of Coronavirus through cash, we are here to put those rumours to rest in one of our previous blogs that you can read here.