Saying goodbye to banknotes and coins can have a negative impact on vulnerable groups such as older consumers, but also on SMEs and the self-employed.
However, after the lockdown and due to fear of contagion, the digital purchase curve has skyrocketed. Something that threatens to put an end to cash payments. How is a world without cash perceived?
Avoiding touching any surface in commercial establishments is one of the most repeated recommendations by authorities to limit the spread of coronavirus or COVID-19 . These limitations also extend to the use of banknotes and coins, another surface.
The “post-COVID-19” era has led to an intensification of consumer digital behavior , taking a spectacular leap towards online buying and selling . Online payments have georgia email list experienced a 55% growth since the state of emergency was declared, while cash withdrawals from ATMs have fallen by 68% since last March.
Are we witnessing the beginning of the end of cash payments ? How is this increasingly growing behaviour affecting businesses? What advantages and disadvantages does the end of cash payments represent?
In this post, we give you all the answers.
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The end of cash payments: solution or problem?
Undoubtedly, in addition to reducing the capacity for contagion, the end of cash payments would cut off at the root the possibilities for individuals and legal entities to avoid their tax obligations. Not to mention the underground economy, which would have its days numbered.
However, the atmosphere of uncertainty in the face of the end of cash payments is taking hold among citizens and professionals: capital flight, increased poverty, grievances for rural areas...
What threats may arise with the end of cash payments?
The idea of a world without cash is giving rise to very negative speculations for certain businesses and sectors of the population. Below we list the most relevant ones.
The payment gap
Some economic experts suggest that today's consumer rejection of cash payments could lead to a " payments gap " between those who have access to digital means and those who don't. The biggest losers? Older consumers, a group without digital skills and forced to enter an unfamiliar system.
Abusive financial conditions for the most disadvantaged
If cash payments were to disappear, everyone would be forced to open a current account and have a credit card, and would be subject exclusively to the decisions of financial institutions. In a scenario of an oligopoly of banks, they could decide to charge more fees or deny credit to the most economically vulnerable people .
End of user privacy
The end of physical money could jeopardize citizens' privacy. If all payments are made electronically , all transactions will be recorded and, therefore, banks will have access to this history.