Beyond Convenience: The Hidden Costs of Going Cashless

Frane Maroevic, Director General, International Currency Association

The Hidden Costs of Going Cashless

Recently I had the pleasure of listening to and speaking with Professor Jay Zagorski at the ESTA 50th anniversary conference in Brussels. He explained, with clarity and energy, why cash remains essential for the wellbeing of our societies and stands as a pillar of privacy and social inclusion.

What resonated most was his warning that a fully cashless society could expose us to national security risks—from cyberattacks to system breakdowns—especially in a world facing growing instability, with more frequent wars, conflicts, and both natural and man-made disasters. His book, The Power of Cash, explores these challenges and argues convincingly for the continued relevance of cash.

At the conference we also discussed how the rapid rise of cashless payments is often presented as an inevitable evolution driven by convenience and efficiency. But beneath the surface of this seemingly organic progression lies a more complex reality shaped by powerful commercial interests and policy decisions.

While it's true that some cashless transactions can increase speed and efficiency, these benefits come with significant societal costs that are often overlooked in the conversation.

The Multi-Billion Dollar Push Against Cash

What's rarely discussed is the enormous financial muscle behind the cashless movement. Payment service providers are investing billions of euros annually in advertising campaigns designed to shift consumer habits toward digital payments. The global advertising market reached nearly US$1.1 trillion in 2024 with financial services providing a lion's share.

Beyond consumer-facing advertising, payment companies are spending hundreds of millions on lobbying efforts to influence regulations in their favor. This lobbying has real consequences. Bills mandating cash acceptance have faced intensive opposition from the credit card industry and tech-focused retailers.

Consumer advocates argue that any decline in cash usage strengthens the monopoly power of card companies, who could then charge increased fees disproportionate to actual costs.

The Real Impact on Vulnerable Communities

The move toward cashless-only policies disproportionately affects those already at society's margins. When businesses refuse cash, they effectively exclude the poorest who rely on physical currency for their daily needs. This creates a two-tier payment system where those without access to digital banking face increasing barriers to participation in the economy.

Privacy and Autonomy at Risk

Every digital transaction creates a data trail that can be tracked, analysed, and monetized. This erosion of financial privacy represents a fundamental shift in our relationship with money. Cash transactions provide a level of anonymity and personal autonomy that digital payments simply cannot match. Not everything we do needs to be recorded and tracked.

Resilience and Security Concerns

A payment ecosystem overly dependent on electricity and digital infrastructure is inherently vulnerable to disruptions. Power outages, system failures, and cyberattacks can render digital payment systems unusable, leaving consumers and businesses without alternatives if cash is no longer widely accepted.

The Spending Effect

Research confirms what many have long suspected: we tend to spend more when using cashless payment methods compared to cash, potentially encouraging overconsumption and debt.

Cybersecurity Vulnerabilities

The shift to digital payments exposes consumers to increased cybersecurity risks. In 2023 alone, there were 2,365 cyberattacks affecting over 343 million victims, with data breaches increasing by 72% since 2021. As more financial activity moves online, these risks will only grow.

Widespread adoption of cashless payments should be viewed not as an inevitable outcome but as a warning. It represents a fundamental transformation of our payment landscape that demands careful consideration of who benefits, who is harmed, and what values we want our financial system to reflect.

As we navigate this transition, we must ensure that the convenience of some doesn't come at the expense of the essential needs of others, and that the pursuit of efficiency doesn't undermine the resilience, privacy, and inclusivity that cash provides.