The journey towards the Cashless Economy
History has always fascinated me, and it actually, at times, surprises me when I look back to compare the journey that human existence has traveled. One of the important fundamental elements of human existence has been money/currency/ any good that is widely used and accepted (acceptance by the authority of the state) in transactions involving the transfer of goods and services from one person to another. From the time of using commodity in exchange of commodity to completely going cashless, human civilization has had a journey of its own in this aspect. From gold/silver/copper coins, the history traces back in the year between 1165 to 1174, china, which apparently is the first country to issue banknotes under the reign of Emperor Hsiao Tsung.
Sweden and its love affair with Technology
From being one of the prime and widely accepted forms of exchange in the past couple of centuries, now the printed notes are not the first love for the vendors when it comes to countries like Sweden, Canada, Denmark, Norway. When we talk about Sweden, From being the first country in Europe to adopt banknotes (1661) to becoming the cashless economy in 2023, After 362 years, Sweden is most likely altering its preferences when it comes to accepting and making payments. More than 80% of all the transaction is being conducted electronically.
In 2012 one of the major steps taken by the six largest banks in Sweden was to develop a mobile-based application for ease of payments for the Swedish population. The application, called “Swish,” established as an alliance, was heartily appreciated and accepted by everybody in Sweden. The banks and government worked hand-in-hand to encourage citizens to embrace the cashless economy. Swish has almost being accepted as a Swedish standard for mobile payments. The application is now widely popular and is used by the way over half of the population in Sweden. However, the senior group among the population still relies on cash which comprises of Only 13 percent of the total population in Sweden.
Currently, the quantum of cash transactions of the country has been less than 1% of the total transaction in Sweden. The discouragement of cash transaction has led to the acceptance of debit cards and mobile payments by more than 99% of the merchants and depicting an increasing trend in a cashless transaction all over the economy
Another major step by Sweden Central bank is the introduction of e-krona that can further accelerate the country’s cashless society, which kicks start in 2019 and is to be implemented throughout the country in 2021.
It’s not only Sweden in the trend. China, the UK not too far away
If we are talking about the cashless economy and digital payment, how can we forget to mention China, who has been the leading economy to use QR codes as a method of payment which is mostly dominated by encent’s WeChat Pay or Alipay, which is owned by Alibaba. In the recent 40th China statistical report, it lists 724 million people in China use mobile phones to go online. While most of the countries are trying to pave the way for credit/debit cards and online payments, the republic of china has embraced the introduction of QR codes in the country. The Chinese government, retailers, and banks have encouraged the use of QR codes all throughout the economy. One of the most innovative techniques used by the people of China has been widely appreciated and accepted by the world.
Also, the UK has not been lagging behind when it comes to the digitization of the economy. Apparently, card payments took over cash payments in 2016. Also, in some instances, there isn’t an option to pay through cash at all.
What’s the Problem with the Cash-Oriented Economy?
Bank Robberies
Drug and illegal Weapon marketing
Tax evasion
Lacks Transparency in the movement of money
Overall Growth and Development
Going Cashless is the Solution
The solution to all the above-listed problems comes down to one major change which is being accepted universally is the cashless economy or the digitization in the economy. Not only developed countries but those in the course of development are taking major steps to be tech-friendly. It is obvious by the fact that when such critical transactions are done online, the same needs to be protected by the potential hackers, the security has to be of exceptionally high quality to assure people to trust online mechanism without a doubt. Countries like Sweden, Canada, China, and the UK have managed to establish a tech-friendly but relatively secure environment for the people to store, pay and receive their wealth in the manner they want.
Nowadays, one of the major issues that most of the states across the world face is the unfair means used by the general population to avoid legitimate tax liability. Online payments and digitization are the most viable and permanent solution visible universally. However, as of the current scenario with the countries like India, Bangladesh, and Pakistan, it is reasonable that 100% digitization is not possible universally, but once, even if 70% of digitization has been accomplished, we can thereafter look for what seems to be a dream as of now.
Sources:
https://interestingengineering.com/sweden-how-to-live-in-the-worlds-first-cashless-society
https://qz.com/1679019/swedens-cash-in-circulation-increased-for-the-first-time-since-2007/
https://www.moneyunder30.com/what-countries-are-going-cashless
https://www.corecashless.com/the-worlds-top-3-cashless-countries/
https://interestingengineering.com/a-brief-history-of-printed-money
https://www.thebalance.com/pros-and-cons-of-moving-to-a-cashless-society-4160702
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