Assistant Professor Niklas Arvidsson at Industrial dynamics department at KTH is running a project on Cashless society. The main objective is identify and describe the potential consequences of “cashless-ness” for consumers, merchants, public transportation, banks, payment providers, mobile operators, etc.
Within this project a number of workshops have been organized. One workshop was run March 13 with focus on merchants and the hotel and restaurant sector and another one March 15 with participants from the financial sector. Some of the interesting findings from the workshops are:
• For the Swedish market it was clear that the workshop participants believe that it will take many decades before cash is replaced at a 90% or 95 % level.
• Mobile payments should primarily be discussed in terms of how agreements are established with merchants and how the payment solutions are integrated with consumer’s bank and credit cards accounts. Now there is a trend to focus on contactless technology, use of QR codes, availability of NFC phones, security solutions, and location of secure elements.
• A strong driver for making mobile payments to happen can probably be to use the mobile phone as a “market channel” to the consumer. Payment services and value added services can be integrated.
The last item supports the main idea of the proposed KTH research project “Mobile payments – Not only transactions” with focus on services and different forms of value added before and after the actual moment of the purchase and transaction.
There is no stopping the evolution to a cashless
society. It will be a convergence of the
internet, smart cards such as Visa PayWave & MasterCard PayPass, and a
smart phone that can be used much the same way as a credit card with PayWave
& PayPass. This will be the final
nail in the coffin for cash. Our smart
phones will contain every debit and credit card we own, as well as all of our
discount vouchers and receipts in digital form.
No more bits of paper to carry in our wallets. Google with MasterCard will produce a Google
wallet, Visa will have an e-wallet, and PayPass will offer a similar product as
well. These are called virtual
wallets.
What I think will happen is that we will have a de facto
cashless society first, where a majority of transactions will be done without
cash, both in numbers of transactions and in the quantity of money
involved. We will probably have a de
facto cashless society in about 5 years.
After a period of a further 30 to 40 years, or somewhere thereabouts,
cash will be eliminated from our economy after the nation has had a debate
about this issue.
It will be extraordinarily convenient not to have to ask for
and carry any more paper receipts or physical discount vouchers! How incredible, powerful, and efficient will
both Visa’s, PayPass’s, and Google’s e-wallets be, once they become
commonplace? The question is whether or
not the banking system can adapt and catch-up?
I am absolutely confident that we are on the
verge of a tipping point regarding the eventual elimination of cash from our
economy. As long as there is a national
regime of privacy legislation and the security and integrity of the internet is
assured, powerful institutions such as state and federal governments will seek
and obtain taxes in full in future, as well as not have to bear the cost of
printing and manufacturing cash.
Police and intelligence agencies will advocate a cashless
society in order to limit or prevent crimes associated with cash. Cash always provides criminal anonymity as in
the drug trade, terrorism, burglaries, organised crime, and cash thefts. The crime of counterfeiting money will be
completely eliminated.
Banks and most businesses will want a cashless society
because it will substantially lower their costs, by not having to deal with
cash on a daily basis. No more counting,
storing, or transporting cash will mean both safer banks and businesses, and
lower cost overheads. A cashless society
will be evolutionary, convenient, and unstoppable. It will provide many social and economic
advantages, relative to a society that maintains cash.
Hey John..
Interesting comment.
What do you think would me the downsides for the consumers?
I don’t see any downsides to a cashless society in the
long-term. Technological developments
will cater to the needs of people who are visually impaired, intellectually
disabled, or the elderly. What I mean by
the elderly will be people from my own generation; the baby boomers. I am in my middle 50s.
One important task for app developers will be to create an
app that will mimic the cash effect.
What I mean by that it is easy keeping tabs on your spending when you
are using cash. An app will be developed
that will create the same or similar experience of using cash. I figure that it will have budgetary
functions, and keeping tabs on your credit card spending by journaling them all,
so you have a cumulative debt figure whenever you want one.
The cashless society will also mean the end of personal financial privacy for the ordinary person, since every one of his transactions will be available for tracing, tracking, viewing and no doubt data-mining. It gives governments and banks utter totalitarian control over the citizens; although sadly the citizens are stupidly lapping it up and will not realise their fate until the grid snaps shut.
It will mean the end of jumble sales, car boot fairs, village hall sales, local art and craft shows, children’s pocket money, donation tins, single traders…. you finish the list.
As for mobile phones, stuff em. I dont own one and won’t be buying one anytime soon. I’ve just chopped up my MBNA RFID card and told the company to shove it where the sun doesnt shine.
Oh yes……just wait for the effects of power failures. All it needs is a real good un to take out the Internet and card readers, while sunstorms zap out the microchips in the phones. Cash is going to look a pretty good deal in such times.
There must be a national privacy regime in tandem with a
cashless society because privacy is a very important issue. You can opt out of reward programs if you
wish, thereby stoping the tracking and recording of all of your purchases in
the particular business’s stores. This is
not a system of ‘utter totalitarian control’ and to say this is simply grossly
overstating the case.
It will not mean the end of jumble sales, car boot fairs,
village hall sales, local art and craft shows, children’s pocket money,
donation tins, and single traders. Mobile
Eftpos units and mobile phone technology will adequately cater for all of these
circumstances.
When there is a power failure there are things such as
emergency backup power and the manual paper recording of both credit and debit
card transactions.
By the way, the above username is John Candido.