Cypriots Champion Cash Choice for Financial Freedom
Nov 18, 2024
Cypriot news site Philenews is calling for ‘a balanced dialogue’ on preserving cash alongside the adoption of cashless payments, since physical money is essential to personal privacy, financial autonomy and social inclusion.
Finance journalist Michael Solon Kassini writes that digital payments are spreading rapidly in Cyprus, and while they are useful tools, they also ‘hide significant risks.’
The transition to a cashless society strengthens the concentration of power in the hands of a few large companies and governments, reducing anonymity and freedom in financial transactions, and potentially placing a greater burden on socially and economically vulnerable groups.
Kassini notes the driving forces behind the rise of cashless are banks and fintech companies, which play an intermediary role in transactions, ‘reaping enormous profits from data collection and transaction fees.’ He warns that ‘this concentration of power raises concerns as it erodes citizens’ freedoms and increases surveillance of financial activity.’
Kassini also points out that, while cashless payments may be preferable for some, they are entirely inaccessible for others, risking a worsening of financial inequality should the option to pay with cash not be retained.
The elderly, low-income individuals and those living in remote areas without access to banks or the internet may find themselves shut out of the digital economy.
Additionally, though offering full payment choice is ideal, facilitating cashless payments can be costly for small businesses, and risky for companies of all sizes as well as the wider economy.
Small businesses may also bear a disproportionate cost of the transition, reducing their competitiveness compared to larger companies. Moreover, the growing reliance on digital payment systems increases the risk of cyberattacks, which could jeopardise financial stability.
There is, of course, a simple answer: keep cash available and usable. When everyone has the option to pay with cash or use a cashless option, on a transaction-by-transaction basis, there are clear benefits for individuals and societies.
In times of crisis, cash remains the only reliable means of exchange. Maintaining cash ensures that all citizens, regardless of their digital access, can participate in the economy without being excluded. Preserving cash as an alternative payment method in a digitalised economy is not only essential for protecting privacy but also for enhancing financial autonomy and social inclusion.