Is it really possible to all live in a cashless society? The world has been trying for years: cash in circulation is decreasing at a global rate of around 7.5% and Anglo-Saxon countries are at the forefront. The most innovative example is Sweden: currently the cash here is half compared to 2007 and of the 1600 Swedish bank branches only 700 distribute banknotes. The numbers for Italy are very different, where 83% of transactions take place with paper money (Bank of Italy). A society that relies exclusively on credit cards and electronic payments has recognized advantages. But Sweden’s experience and the studies carried out also bring the risks to the fore: inclusiveness first and foremost.
In Sweden it is difficult to find the possibility of paying in cash: from shops to car parks, from means of transport to bills. The transition to a cashless society was accelerated in 2012 with the introduction of the Swish mobile payment app. And after twelve years today only 8% of Swedes use cash (40% in 2010) and 90% of young people use apps or smartphones even for small expenses. Furthermore, the Swedish Central Bank is considering the introduction of a national electronic currency, the e-krona.
The benefits of a cashless society in circulation? Simplification, first and foremost, for consumers and traders. Faster transitions, no change errors and the ability to manage everything with your smartphone. Then there is safety. Fewer thefts and robberies. Then there is fiscal transparency, with the reduction of tax evasion and money laundering. According to research carried out by Ambrosetti, if Italy increased the share of electronic payments approaching the European average, the tax recovery would amount to over 40 billion euros per year. Then there is the economic advantage given by a reduction in cash costs. Printing, distributing and managing banknotes and coins costs around 133 euros per inhabitant per year, an expense that could be drastically reduced with digitalisation.
But there are also several problems to face in a society where you can’t buy anything with cash. There is a segment of the population, it is already visible in Sweden, which does not have the necessary technological resources and credit cards and is therefore at risk of social marginalization. These are mainly elderly people, young people with low incomes, people in socioeconomic difficulty (refugees, homeless, unemployed) and citizens who live in “isolated” areas of the country. For those who depend on cash (due to poverty or socio-cultural reasons), accessing goods and services (even the simple bill or daily shopping) becomes an obstacle course. And the cashless society thus shows all its limits.
Another critical issue is cybersecurity. With total dependence on digital systems, the risks of cyber attacks increase. In Sweden, a recent attack that interrupted electronic payments made the problem concrete: a completely digitalized system is more vulnerable. Finally, the absence of cash can be problematic in emergency situations. With blackouts or technological malfunctions, not having an alternative for transactions can also prevent the purchase of essential goods. And in fact the Swedish Central Bank is working to keep cash accessible, that is, forcing some shops to continue accepting it for goods considered essential.
Therefore, if on the one hand living without cash seems to work and bear fruit, on the other hand the problems of inclusiveness are evident. The question remains: are we really ready for a cashless society or is the right mix the solution?
