According to a new report, millions of people could be in danger of being affected by the risks of shifting towards a completely cashless world.
While large tech companies such as Apple believes that in the near future, there would be a growing trend of people depending on a combination of using credit card and digital technology for making payments, there are a number of richer countries which encourage shifting towards a completely cashless society.
There have been some concerns in the United States by a forecast in the drop of usage of cash. In fact law makers in New Jersey are contemplating introduction of regulations to prevent setting up of card-only stores. It is estimated that as few little as one-in-five payments are made in cash in northern Europe. And about 20 per cent of Swedes have claimed that they never withdraw cash at all.
These were highlighted in a new report called “Access to Cash” which was released on Wednesday. The report pointed out that those who are poor or in debt could be handicapped and disabled people, or those belonging to rural families and such people in the UK could be at risk of being influenced by a financial abuser as the country risks drifting into a cashless society.
“Many are struggling to participate in our digital society. If we sleepwalk towards a cashless economy, we’ll leave millions behind,” said the report, which surveyed 2,000 people and charities.
The report identified a number of groups of people who would be at risk from because of a cashless society. The groups include those who reside in regions of the country where the internet connectivity is poor and as such payments could be stopped because of poor connectivity. The situation would also hit those poor people who depend on cash to ensure sticking to their tight budgets. Those who are partners in an abusive relationship could stand to lose their financial independence is they do not have access to cash. Such groups can also include those who are either physically or mentally ill and hence could find using digital payment methods tough.
With reference to the UK, the report further predicted that cash is only used as a necessity by about half the U.K. population, or around 25 million people. It also noted that that in next 15 years, cash use could fall to just 10 percent of all payments.
While it was neither impossible nor undesirable that the UK would move to become a cashless society, Natalie Ceeny, chief author of the report, noted that the country was not ready for it because many would face “increased risks of isolation, exploitation, debt, and rising costs.”
Cyberattacks or failures in IT could cause “catastrophic failure” in the economy, the study further warned.
(Adapted from CNBC.com)