The pace at which many countries are approaching a cashless system has picked up as the pandemic lingers. The benefits of contactless payments have been embraced in many nations that are actively working to prevent the spread of viruses and disease, in particular COVID-19, by reducing the close contact between people making and receiving payments.

There are many places where cash is still the preferred payment method. Flea markets and food markets rely on cash payments as many people have these stalls as side or hobby businesses that do not generate enough profit to pay merchant fees. However, fintechs are making it easier for even small or occasional merchants to accept cashless payments, so will the world become cashless, and what would be the result for better or worse if economies no longer relied on cash?

What Would a Cashless Society Mean?

No paper notes, no coins. All payments would rely on electronic methods of payment using cards or devices:

  • Debit cards linked to a bank account
  • Credit cards
  • Gift cards
  • Payment apps
  • Mobile and digital wallets
  • Cryptocurrencies
  • ACH or wire transfers

There would be no coin jar by the door to empty your pockets into. There would be no lost banknote as you rummage through your pockets. All your money would be accounted for electronically, as would all movements of your funds.

There is no such thing as a cashless society right now. All nations continue to mint money. And while people find the convenience of cashless payments appealing, there are others who are well aware of the implications that moving to fully automated payments means.

Sweden is often recognized as a cashless pioneer. According to the European Payments Council, cash transactions accounted for just 1% of Sweden’s GDP in 2019, and cash withdrawals have been steadily declining by about 10% per year.

It also means that the government is able to track all your transactions. This is not a concern in and of itself, but what should concern people is the use of transaction data. This data could be sold and used by businesses to target or manipulate sectors. While in many places this would not pose a threat, in other societies this information could be used to target sectors or, create or widen gaps.


There are benefits to moving your digital business towards an entirely cashless system. While you can only accept online payments electronically, other areas of your business might still rely on cash. So what are the benefits?

Easy Funds Management

All recording and tracking are done automatically. For businesses, this can be further improved using software that tracks and manages finances for businesses.

Tracking of accounts is obviously vital to the success of your business.

Funds are Safer

Your online accounts are more secure than carrying cash. Businesses that need to deposit cash takings are vulnerable to loss, theft, and even violence. Online stores, while somewhat exposed to potential hacking, are proven far safer when it comes to tracking, protecting, and securing funds held in digital wallets and online accounts.

Save Time

Cash operations require a person to withdraw and deposit cash. This needs to be done in person, even large operations need a physical presence to handle cash, be they staff or security.

However, online operations only need to do their banking once, online, and with no waiting in ques or time on security personnel.


There are some disadvantages to living in a cashless society. The biggest disadvantages associated include:

Exposure to Hackers

While online security has improved and payments security now usually requires at least 2-factor verification, businesses and individuals are still exposed to hacking and fraud by the simple fact of being online. This can be a bigger threat than simply losing a wallet because if your ID is stolen and used by nefarious actors it can take years to recover and restore your credit and trust online.

Technological Difficulties

When the power is off, payments are also canceled. The problem with a society based entirely on electronic payments is twofold; one, power fails and electricity supply is not guaranteed. Two; no country has reached absolute net neutrality. The principle of net neutrality means Internet service providers should be mandated by the national government to treat all Internet data as the same, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication. This would mean that internet providers cannot block or charge more for different website access. This would allow all people to access the internet at the same level, meaning people with less financial resources have the same access as those with more.

Overspending Easier

When using cash, it is easy to see it decreasing as you spend. Using cashless payment forms, much like using a credit card, can be difficult to track when spending. While most people have auto-notifications set up to email for every payment, it can be more difficult to understand the spending.


Fees for having a bank account and withdrawing cash are relatively low. Online providers charge more fees, more often. Consumers and businesses have no choice but to store their money with a centralized bank. Even online-only banks charge fees. There is no way to avoid charges for using your own money. In a cashless society, there are more opportunities for fees to be imposed at various stages of the payment process, costing customers more than cash transactions might.


  • Less time and cost spent on depositing cash
  • Power outage or other technological difficulty mean transactions stop
  • Easy monitoring and documentation of finances
  • Potential overspending using cards rather than cash
  • Improved security
  • Potential higher fees
  • Easy currency exchange when traveling internationally
  • Limited payment options without cash. Not all merchants will accept the same payment methods.