Malaysia’s New Straits Times recently weighed the possible fallout of cashless economies across Asia, sounding a note of caution regarding freedom of payment choice and the damage that may be done should it be eroded.
The article, by Rish Tandapany, notes that while it is increasingly feasible to conduct most financial transactions digitally, ‘a cashless society is still far from reality’. With economic inequality and inclusivity still major problems around the world, a move away from cash risks exacerbating them.
According to the World Bank, China, Indonesia and India account for over 30 percent of the 1.7 billion unbanked adults worldwide, and the majority are women. For those lacking bank accounts, or reliable access to banking facilities, a shift to cashless transactions is discriminatory, denying them access to goods and services.
Tandapany observes it’s not just the unbanked who could be left behind in a cashless economy: the elderly and disabled also face challenges with digitalisation, and there are those who distrust digital payments, or lack the technical knowhow or equipment to use them. Combined with concerns around privacy and fraud, the adoption of cashless transactions is far from inclusive.
In Asia—where financial inclusion is a serious issue many countries are grappling with—payment companies and fintechs are being asked to better meet the varied and complex needs of consumers. In order to realise this goal, some companies are folding social and economic inclusivity into their core ethos.
Tandapany uses digitally-advanced Sweden as a case in point that the world, let alone Asia, is not ready for a cashless society.
The case of Sweden, where public outcry forced regulators to impose levels of cash circulation, illustrates that socially we may not be ready to be fully cashless.
To protect the unbanked, the elderly, disabled and vulnerable people, those who distrust digital transactions, and those for whom the tangibility of cash supports budgeting, the way forward is clear. Governments and businesses must provide education and support for those wishing to engage with cashless transactions, and simultaneously protect access to cash, and the right to use it in payments, for those who are choose not to, or are unable to engage digitally.