Who In Their Right Mind Would Want A Cashless Society?

Martin Brinkmann
Mar 19, 2012
Updated • Sep 1, 2018

I pay with cash wherever I go. Heck, I would pay in cash online if there was a possibility for it. Doing so has a number of reasons, from privacy over reduced direct or indirect fees to avoiding overspending. It also seems to be a lot faster than paying by card, at least in my country where you often either have to type in your security code or sign a receipt before the transaction is finalized.

Nothing's worse than having to stand in line behind someone who is buying a pack of bubblegum with a card.

You probably have read that there is a movement in Sweden to make the country the first cashless economy in the world. ZDnet for instance ran the story today, but they have not been the first to do so. It actually dates back at least to 2010 when the New American published the article Sweden Considers Cashless Society.

society without cash

Before I take a look at why a cashless society is bad for the majority of people, I'd like to take a look at the other side. Who is advocating a cashless society, and why?

As far as Sweden goes, it seems that a group of government officials, celebrities, and unions are pushing towards a cashless society. The core reason mentioned is a drop in robberies ever since the society turned to electronic transactions. According to information posted by the Huffington Post, bank robberies in Sweden are down from 110 in 2008 too 16 in 2011, and robberies of security transports are down as well.

While that is an impressive drop, there is no study that links the reduction to the shrinkage of the cash economy in the northern European country. The same article mentions that bills and coins represent 3 percent of Sweden's economy, a stark contrast to the 7% in the U.S and the 9% in Europe.

How do ordinary people benefit from a cashless society? Some like ABBA's Bjoern Ulvaeus believe that less people will get robbed as a consequence, as robbers can't take away what's not there. He fails to mention that bank cards can still be exploited, right now for instance when people withdraw money but there will be possibilities in a cashless society as well, for instance through impersonation.

A cashless society however has several other consequences:

  • It is possible to track every transaction that is made electronically. While that in itself is bad enough from a privacy point of view, it can also mean that people change their spending. Some people might not spend money on things that they do not want to be linked to. This can be a donation or a purchase for instance. Some agencies would be tempted to get their hands on those information, for instance for tax or law enforcement purposes.
  • Overspending is fueled by credit and debit card transactions, as it is more difficult to keep track of all expenses and easier to spend more money because it can be done with a card. If you only have cash, you never can spend more than you have on you.
  • Fees for transactions, either indirect by charging the merchant, or direct by charging a fee for every transaction, mean that you will pay more for goods and transactions, and that it is even more of a nuisance to keep track of the spending.
  • Trading could become popular again. While you can't pay your neighbor for painting your house anymore without the tax bureau taking note, you could trade services or goods instead. It is also not clear how you would pay someone else. Would you have to go through a bank to do that? How would you pay that 14 year old girl for baby sitting your kids or the kid operating a lemonade stand? How would you make payments on the Flee Market?

What's your take on the development? Do you think that things are progressing in the right direction?

Article Name
Who In Their Right Mind Would Want A Cashless Society?
The article discusses the negative effects and impacts that a cashless society would likely have on the society in general and individual people.
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  1. Harding said on September 11, 2015 at 7:38 am

    The answer to all your concerns is bitcoin.

  2. Wingwalker said on November 25, 2013 at 9:07 pm

    Very clever these Goblin Bankers and Government minions:
    First, you remove the gold standard to produce a “fiat” currency.
    Second, you print an incredible amount of worthless paper.
    Third, you get rid of all the paper.
    Fourth, you record ALL economic transactions (to include time, date, location
    and trading partners) and use the information to guide marketing.
    Fifth, If you are bank, you charge a transaction fee, if you are a Government you charge a tax.

    The Sixth step is to acquire “Item” codes and monitor for “illegal” transactions.
    “The muggles can’t see dementors, can they boy?”

  3. kalmly said on March 21, 2012 at 3:54 pm

    To answer your question: No one – Only the government.

    1. Jojo said on March 21, 2012 at 6:06 pm

      I disagree. I am fine with a cashless society.

      Seems like an awful lot of paranoia around here! Whew.

      1. goshen said on March 22, 2012 at 7:31 am

        you must be one of the sleeping sheeple

  4. john said on March 21, 2012 at 3:02 pm

    There are many reasons why the government would support the idea but the main beneficiary is the bank, a private company with no more rights than any other entity. But because the government allows it, the bank charges the merchand a certain percentage, minimum 1 but up to 5% of the transaction value. This acts like a tax on society for which we get a little convenience but lose a lot. Most money circulates as people get paid every month. I would guess the money goes round the system say 6 times in a year. If half of that is on a card, then a minimum of 3% but probably 10% of all the money in your country is creamed off by the banking system each year. That is not allowing for their profits on lending. Yes they will cover fraud and other losses but no wonder the banks have grown rich and pay bonuses to dream of, they are syphoning off your wealth, legally, at a rate that only the government can aspire to. At least the government provides services, the bank just provide bonuses for themselves.
    Cash should be used whenever possible. You shoul lobby your government to limit credit card charges to a maximum of 1/2 percent, then there would be more money in the real economy and less in the bank. There would be no need for tax cuts to stimulate the growth we need.

    from john near bath uk

  5. Paymun said on March 20, 2012 at 7:17 pm

    this is a terrible idea! you know how much control you would give the government? enough to control and dictate your whole life and finances. This guy is does like our government lets shut-down his financial card account. GG this guy has nothing to live for… how about the poor people? people who hustle money? street artists and musicians. This is TERRIBLE!

  6. Jojo said on March 20, 2012 at 2:47 am

    You are missing the big picture.

    A cashless society makes great sense to governments everywhere. Electronic cash makes it difficult for people to work “under the table” and to avoid taxes. It makes it much more difficult for criminals to “launder” money. And it eliminates the problem and expense of having to try to keep one step ahead of cash counterfeiters. Countries like Iran and North Korea have very good US$ counterfeiting operations.

    Here in the USA, you usually don’t have to sign any credit card slips if your purchase is under $25. And what is the big deal about typing in a pin code if you use a debit card? What’s the delay there, 3 seconds?

    Lastly, if you use Quicken and download transactions regularly, it is easy to reconcile your purchases using charge cards w/o having to type anything at all into Quicken.

    1. Nebulus said on March 20, 2012 at 2:13 pm

      Not everyone lives in the USA :)

  7. Rich said on March 20, 2012 at 2:19 am

    People are robbed for their credit and atm cards and beaten or killed for the pin numbers/access. This is much more serious then a take your money and run robbery. A cashless society only benefiets governments and corporations.

    1. boris said on March 20, 2012 at 6:14 am

      Your logic does not make sense. Yes there are a lot of violent crimes with ATM card theft. But most of them happen when people are trying to deposit/withdraw cash at atm machines.

  8. Cencio said on March 20, 2012 at 12:57 am

    About 99% of my transactions are currently cashless. I like my privacy, however I also like the convenience of being able to track all my spending without needing to use a little notebook every time I take out my wallet.

    That being said, I still think cash is needed and convenient. Having to be able to take credit or debit cards, or have a bank account, to take payment, further marginalizes the poorest in society, and I agree that there are some legitimate transactions that one would want to keep anonymous.

    1. boris said on March 20, 2012 at 1:08 am

      Strange, I think I put my name on my post. How did I become “cencio”?

      1. boris said on March 20, 2012 at 1:21 am

        Again sorry, I posted long message and I thought I was mine.

  9. Nebulus said on March 20, 2012 at 12:49 am

    This is one of the dumbest ideas I’ve ever heard… First of all, the reason for this change is stupid, because the lack of cash might deter robbers, but it will encourage credit card frauds. So basically we change one kind of crime for another. Second, this will give the authorities/companies more control than ever over the people’s life (which, incidentally I think it’s the real reason for pushing this kind of change).

    1. boris said on March 20, 2012 at 1:06 am

      Do not agree on exchanging one crime for another. One is extremely violent with many people in danger on each robbery. Other, while still a serious crime, usually do not innocent people in mortal danger.

      1. Nebulus said on March 20, 2012 at 2:17 pm

        Yes, I agree with you; it is indeed an advantage of a cashless society. Probably the only advantage, which is reduced close to zero by the rest of disadvantages :)

      2. Jim said on March 20, 2012 at 1:42 am

        Another aspect to consider is the typical robbery is over quickly. As long as there is no violence involved, the actual event is over in a couple of minutes. After that the victim generally just has to deal with the emotional part of being robbed and typically a short-term financial setback. The overall time frame is short.

        On the other hand, electronic theft typically indicates some degree of ID theft. In the U.S. it can take months or even years to recover from that.

        It’s a tough choice that I’m sure none of us would ever want to make.

        As for a cashless society, I think it’s a bad idea. You need some sort of physical exchange medium for when the power is out or for other contingencies. Besides, how the heck can I stuff my mattress with electrons? :)

  10. Roman ShaRP said on March 20, 2012 at 12:06 am

    I’m living in ex-USSR country, you know. Many people here don’t have even debit cards, don’t trust in banks, don’t trust in credit at all.

    You might not believe that, but
    – the deposit-credit interest rate in local currency can be higher than 15% yearly (even mortgage rate can be 16%)
    – the interest rates on so-called “consumer credits”, so popular before 2008, could be 60% yearly, pawnshop rates is also that high
    – many people buy goods at open-air bazaars, where you won’t find any equipment for card processing at all
    – in 2008 crisis many people got in trouble with their cards because bank ATMs didn’t gave them money (even in bank-issuer sometimes). I remember my own card was once rejected by ATMs of 4 different banks.
    – also many couldn’t take back their deposits from banks in trouble that year, more than dozen of banks got into administration
    – in 2009 or 2010 I got about 10% discount for paying in cash for TV set in a big electronic shop
    – many local internet-shops, delivering their goods via couriers, prefer cash, for those who pay cashless prices can be 7.5% higher (Really! Some people says, it is because of some tax evasion schemes used by merchants, which are trickier to do with cashless money than with cash)

    So… Any cashless developments are rather far from us here.

  11. Howard Pearce said on March 19, 2012 at 11:21 pm

    Many people irrationally hate money as if it is somehow more eveil than other substances of wealth that could be owed.

    As far as being cashless, all advanced economies have a medium of exchange.. Removing that would take the society back into a barter economy with all the disadvantages that the absence of money has.

    1. vivianna said on March 15, 2014 at 4:53 am

      The next worry on the list is….the electricity is turned off……!
      What if…?
      David Rockebaby has a switch to turn off the grid across America. No more electrical transactions no cash anyhow.
      He wants you to know that if a solar flares comes our way, he will turn it off at the last moment.before our grid is fried.
      Now he has control. When and if he shoutd switch it back on, is up to him…really..
      We don’t need to like it. We will not obey such a idea.
      No sir…!.

    2. Sim said on March 20, 2012 at 5:02 am

      At least with bartering it would be more difficult to try and launder $15 Trillion through RBS. That would be a lot of pigs and goats.

      Or try and smuggle $6 Trillion worth of US treasury bonds into Switzerland.

      As for peoples hate for money, you should watch Zeitgeist Addendum:

      Also, worth reading books such as “Confessions of an Economic Hit Man” and books about the Federal Reserve. It’s really quite an eye opener what’s going on in the world.

      1. Crodol said on March 20, 2012 at 9:09 am

        I read “Confessions of an Economic Hit Man”.

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