The risks with a move towards a cashless society

The risks with a move towards a cashless society

Is a push towards a cashless society really what we need right now as this global pandemic unfolds? Stay tuned as we discuss below.

The COVID19 pandemic has fundamentally changed the way we live and made us reassess what we previously considered important. In fact, we are discovering that we actually need very little to survive, both as individual beings and as a global society.

Governments across the world have currently told people to work remotely or stop working entirely, minus the few sectors deemed ‘essential’, such as, healthcare, supermarkets, delivery / postal companies, utilities and banks, with some essential building trades included.

With these sectors still up and running, payment choices are needed now more than ever!

People need to pay for goods and services, to pay mortgages, rent, bills and to be paid… keeping the financial sector busier than ever!

So, with this pandemic in full swing, will the push towards a cashless society across Europe, remain?

Concerns expressed across Europe

Europe’s central bankers have warned that a gradual phase-out of cash in many countries poses a serious threat to the financial system. Relying too heavily on digital payment systems exposes many to catastrophic failures in the events of energy outages, cyberattacks and other potential technology system flaws.

A 2019 study by the European Central Bank showed that while almost 80 percent of all payments are still done in cash in the Eurozone, countries like Estonia, the Netherlands and Finland are already using electronic payments for about half of all their transactions.

Many central bankers have expressed their concerns upon multiple platforms that this is making them anxious.

“Increasingly, central banks insist that cash will still play a role. We do not foresee a totally cashless society,” said Ewald Nowotny, Governor of the Austrian National Bank, at a 2019 conference in Brussels. “If there is for instance an energy blackout, cash is the only surviving way of payment.” [Quoted by Politico]

“We’re under attack every day. If you don’t have your shields up, you notice activity straight away,” said Petra Hielkema, Director of payments at the Dutch Central Bank. “Cash provides trust, and we see a lot of people who really need it.”

Risks of ‘cash deserts’

The U.K Treasury said they still want to “explore how to ensure cash remains accessible and secure for those who need to use it.”

The decline of cash, risks creating ‘cash deserts’ in areas that need it most, in a recent report from the Access to Cash Review, stressed concerns that a move to a cashless society would leave almost one in five (17%) of the UK population struggling to cope.

Closures have affected low-footfall rural areas, which have higher populations of the elderly and vulnerable, who in turn are more likely to use cash!

For those starting a business, investing in digital payment facilities can be expensive and depends on a reliable internet connection and power source. This is not realistic for a stall holder at a pop-up food market. Or for a window cleaner working at other people’s houses. Cash payments are simply more reliable and practical.

Cash is essential for daily life

So for many, cash is essential for daily life and at a time where banks are closing temporarily, ATMs have been providing a lifeline to local communities across Europe with the convenient access to cash.

With the support of many banks worldwide, Euronet is committed to empowering payment inclusions among all consumers with both cash and digital payments. Having choice in payments is crucial as cash plays a vital role in so many people’s lives.

A cashless society would leave many, such as local professions, the elderly and those on lower incomes in a precarious position and we believe it is essential to consider these vulnerable groups in society when debating the need for cash.

If you’re at all concerned about the spread of Coronavirus through cash, we are here to put those rumours to rest in one of our previous blogs that you can read here.

In addition, if you are interested in offering your local community the payment choice that they need, get in touch for an ATM today! Follow the link and fill out the contact form.

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