It feels like we’ve been hearing about the cashless economy for a long time now, but with the rise of mobile payment systems like Venmo, Apple Pay, and Google Wallet, we’re a lot closer than we used to be. In fact, mobile transactions are expected to reach $721.4 billion worldwide this year as more consumers have discovered the ease of paying for things and exchanging money with their smartphones.
Bob Safian, Fast Company‘s editor, today spoke about the rise of cashless payments on CBS This Morning, noting that the technology brings both positive and negative implications for consumers and society. Whatever you think of the trend, it’s not likely to reverse course anytime soon. “This genie is not going back in the box,” Safian says. “And the reason it happens? It’s easier. It’s easier for retailers. It’s easier for us as consumers.”
- The good. The most obvious benefit is convenience. Most of us are already walking around with smartphones in our hands for a good portion of the day. They’re more accessible than our wallets and, unlike those annoying chip credit cards, won’t cause friction at the checkout line. Retailers can also benefit from cashless systems because having less physical cash on hand means having less to lose in the event of a robbery.
- The bad. Cashless payments are easier to track, which raises privacy issues for consumers and security issues for companies that collect payment data. Cybersecurity threats like identity theft and fraud are also a greater concern with cashless transactions.
- The ugly. As society goes cashless, issues like wealth disparity and the digital divide become more salient, because people without bank accounts or smartphones are unable to participate. (The New York Times wrote a story this week about the growing number of establishments that don’t take cash at all.) “There are groups of people who are left out in this,” Safian says. “If you are part of our unbanked part of our population, it means that there are establishments and economic activity that you can’t participate in. That is one of the societal challenges that we have to deal with.”
Check out the full video below: