Cashless society not here, but is getting closer
- Published: Oct 2, 2017, 4 AM
The news from the Netherlands that its bank note printer had closed its operations because of market overcapacity is a symptom of a worldwide movement towards a cashless society. During the month of September alone, a number of international reports were published about the declining demand for cash in consumer payments.
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In Singapore, the increase in noncash payment systems has the potential to increase local bank profits by up to 9 percent over the next two years. Despite that, its prime minster expressed concern that his country had fallen behind China in e-payments and would be ridiculed by Chinese visitors as a result. In England, according to The Telegraph, a new system using fingerprint recognition is being implemented in a supermarket that uses an infrared scanner on people’s finger veins and then links it to their bank cards. Two-thirds of New Zealanders now carry no cash, preferring cards that can be tapped on a payment device. Vietnam is trying to reduce its number of cash transactions to 10 percent by 2020. Tanzania, a nation of 55.6 million people, had over 20 million mobile payment users by the middle of this year.
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The unrecognized breakaway republic of Somaliland, says the BBC, may become the first totally cashless society. There, where its currency has become so devalued that wheelbarrows are needed to transport it, most people are already making their payments by mobile phone.
The BBC calls Sweden “the most cashless society on the planet, with barely 1% of the value of all payments made using coins or notes last year.” Cash is used in just 20 percent of retail sales and is not accepted on buses.
Even in Zimbabwe, whose financial system is a catastrophe, a few organizations are trying to introduce digital payments.
American consumers used cash in 32 percent of all retail transactions in 2015, down from 40 percent in 2012, according to the Federal Reserve’s most recent survey of payment choices.
Despite these trends, there will always be a place for cash. Even with digital advances, many still find the old-fashioned way more comfortable. In Asia, for example, CNBC cites a PayPal study showing 57 percent preferring cash for daily transactions. It rises to 70 percent in India, Indonesia, and the Philippines. There are also added, substantial costs for going cashless, an expense that not all merchants are willing to pay.
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