There are a few countries around the world where cash payments are slowly on the way out. Some people are much in favor of this decision, whereas others are wary of giving central banks, even more, control over people’s money by going cashless. The largest bank in Norway wants to put an end to cash transactions sooner rather than later, simply because cash is dangerous and offers no advantages.
Pros and Cons of Cashless Societies
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While it is certainly true there are very few advantages to using cash payments; there is no reason to completely remove the payment option altogether. One of the most obvious reasons to not make such a rash decision is simply because there are far too many places where payments other than cash are not accepted.
Granted, this may just be a logistical issue that can easily be rectified, but at the same time, it would require small businesses to invest in additional infrastructure the might not even want to use. More and more consumers are starting to rely on plastic card payments, but this solution is far from ideal for SME’s around the world.
Transaction fees on every form of plastic card payment can make it even more difficult to make ends meet for small business owners. Debit cards have a fixed fee per transaction, whereas credit cards are subject to a percentage-based fee. Neither of these solutions is viable in a world where small businesses are struggling already, and enforcing them to go cashless is not the way forward.
That being said, Norway’s DNB noticed how cash has fallen out of favor with consumers and is now primarily being used for illegal activities. Needless to say, cash has always been used for less-than-legal transactions, but it is the first time a major bank admits this fact. Phasing out this form of payment will be quite a challenge, though, as old habits die hard. Going cashless will not happen overnight, by any means.
Norway’s Ministry of Finance is not a big fan of this proposal either, even though DNB admitted the entire banking system is completely outdated. Even though the Ministry of Finance can see where the sentiment is coming from, there are no plans to change the country’s law in this regard any time soon.
One thing consumers need to keep in mind is how moving to a cashless society would put the banks in full control of people’s finances at any given time. In the worst case scenario, consumers will not be able to access their full wealth at certain times, similar to how the financial debacle in Greece unfolded not too long ago. In the end, consumers should always be able to spend their funds when, where, and how they want, without intervention by financial institutions.
Source: The Local Norway
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