Who Pays for a Cashless Society?

There are costs associated with cashless payments, some of which are readily apparent while others can go unnoticed until a problem arises. ABC News has explored some of these costs, and how ‘a cashless society raises concerns about financial exclusion, privacy and safety.’

Among the more obvious cashless costs are card transaction fees, which an increasing number of businesses are passing on to customers amidst rows over the fast-growing percentages demanded by card companies, despite improvements in technology that most would assume might lower fees.

Less immediately obvious are the ramifications of ‘transparency’ in transactions, often cited as a positive for cashless transactions. Dr Chris Vasantkumar, an economic anthropologist as Macquarie University, points out that any external oversight of transactions also means surveillance by third parties.

In these regards, everyone who chooses cashless transactions is paying for them in some way, and in a completely cashless society, there would be no choice over whether or not the cost is too high. It is also important to keep in mind that some members of society would be disproportionately affected.

ABC News points to Sweden as a country that has embraced cashless payments with particular enthusiasm, to the detriment of cash remaining a viable option. The article notes ‘many now believe Sweden went too hard too early, removing cash handling infrastructure that is hard to replace and leaving vulnerable groups behind.’

Australia’s national domestic, family and sexual violence counselling service, 1800RESPECT, is clear on the difference physical money can make in the outcomes of people suffering abuse.

On a nationwide level, the importance of cash to a stable economy should also not be underestimated. In emergency situations—including bushfires or floods—cash allows the purchase of essentials such as food, fuel and shelter to continue while electronic payment systems are inaccessible for days or weeks. ABC News cites the example of 2022’s devastating Lismore floods, during which electronic payment systems crashed, ‘leaving flood victims unable to pay for essential items.’ Salvation came in the form of a cash-filled ATM, delivered by helicopter by a group of five local credit unions.

Fortunately, the solution to the problems of a cashless society—including financial exclusion, the loss of privacy, personal choice and safety, and economic stability—is similarly straightforward: keep cash. By creating policies that support access to and the right to use cash, governments can ensure their people enjoy all the benefits of both physical and digital money, and are able to choose the payment that’s right for them on a purchase-by-purchase level.