TO: Connie Douglas

FROM: Eric James Jr

SUBJECT: How Feasible is a Cashless Society and What Would be its Implications?
DATE: 19 April 2016

Introduction
Cash has become a very important part of everyday life for most people in todays world. So
important, that many people or communities as a whole would realize the implications that would arise if
cash were to be non-existent. The possibility of cash leaving the scene is very important for a number of
things. Social relationships with cash, increasing electronic transactions, as well as new emerging
technologies are factors as to whether a cashless society can become something of the realm.
This report covers the importance of a cashless society becoming existent and how the three
previous stated factors are all playing their assigned roles. The purpose of this is report to further my own
knowledge but to also inform others of my findings. The remainder of this report will discuss the
importance of a cashless society becoming existent, give insight to challenges and possible solutions that
the sociotechnical systems, increasing electronic transactions, and emerging technologies are all facing,
and close with conclusions to my findings as well as an opinion as to whether a cashless society is
feasible or not.

The Importance of a Cashless Society

This topic is particularly important because people or groups of people are pushing everyday to
find the best fit electronic payment or cash system for mass use. Carlo R. W. de Meijer, of the United
Kingdon, explained how the UK is pursuing improvements in their blockchain technology to come to a
cashless society [3]. At the same time, Kenya has seen its own efforts to make electronic transactions
more of the ordinary. M-Pesa, their electronic money transfer system, has already been implemented in

supermarkets and other retail stores. M-Pesa, although, does not try to displace cash completely but rather
make access to cash easier for more Kenyans, especially to ones in remote areas [2]. Payment systems
like Mondex have also seen their fair share of time in the spotlight. These few examples are important
because they demonstrate how technology can be a driving force in how we handle or spend our currency.
Even more importantly, they demonstrate how human and artefactual elements must be aligned for the
technology to survive in its environment [10]. With people all over the world finding a way to incorporate
technology in everyday transactions, it is important we realize how soon a cashless society could possibly
be here.
Aside from the technology aspect, it is important to understand what type of other implications
would arise, whether good or bad, of a cashless society. Privacy, security, usefulness, and increased
benefit are all continuously debated topics in the attempt to achieve a cashless society. The numerous pros
and cons of these various topics are also reasons as to why this has been a long debated idea. Each of
these topics are important as they all play their own role in the development of this heavily debated issue.

Challenges and Possible Solutions to a Cashless Society

A cashless society is an idea that may seem far fetched to many, but something that is very near to
others. In order to fully assess the debate at hand, we should understand the challenges and possible
solutions that each factor of a cashless society faces. There are many more challenges that may have not
been mentioned simply because one may not know all the implications that would arise from a cashless
society until it is here. The following paragraphs discuss my findings of what challenges we may face
from trying to convert to a cashless system and what possible solutions we might take to improve those
problems.

Debit/Credit Card Transactions

An increasing number of debit, credit, and prepaid card transactions year after year continually

prove how technology is almost always involved in a payment transaction. In 2012, 775.4 million general
purpose cards were in force [5]. The term in force means the card is issued, activated, and not expired.
Non cash transactions, as a whole, have increased by an average of twelve billion every three years since
the year 2000 [5].

Challenges
A cashless society is exactly what the term says, but debit cards can be considered cashless even
though they allow direct access to cash. In order for a cashless society to exist, we must truly embrace a
cashless system. In the 1990s and the early 2000s, a company called Mondex experienced an issue while
trying to implement their new found payment system. During this time, Mondex created an electronic
purse system with chip cards devoted exclusively to storing and distributing monetary value [11]. The
Mondex technogram was structured around four different cards which all served a different purpose.
Users ultimately found Mondex to be indistinguishable from other cards, and it was finally terminated in
2001 [11]. An electronic payment system that only brought forth more cards along with not too many
more features could possibly be only a hassle for many people. From the failure of this company, we
realize that any attempt to develop an electronic payment system has to fit within current social norms.
Another challenge debit and credit cards face is fraud. Credit/debit cards are the second most frequent
targets of payment fraud [7]. Converting to a cashless society could mean more fraud if certain security
measures are not taken. Multiple bank and card combinations give hackers endless options of who to
attack, whereas a cashless system has a larger target on its back, primarily because every hacker now has
the same target.

Solutions
A cashless society is only feasible if the proper privacy and security measures are taking place. In
order to take steps towards this, the only thing we can do is improve our current security with current
debit and credit cards while reducing the amount of fraud at the same time. Aside from privacy and
security, in order for a cashless system to exist, there must be some medium to exist to replace the debit

and credit cards we are accustomed to using everyday.

Emerging Technologies
With technology being the driving force behind a cashless society, a closer look at payment
methods like: Apple Pay, Google Wallet, Mondex, and Bitcoin and other alike cryptocurrencies are
necessary to have a better understanding of the topic at hand.

Challenges
Companies like Bitcoin, Mintchip, and Litecoin are all attempting to provide their own
unique currency through an electronic system. Cryptocurrencies as such depend on complete
verification to process its various payment transactions. Whereas with commercial banks, our
relationship is based on complete trust. We are trusting that the bank can secure our funds all
while keeping up with any other promises that have been put forth. The main technology behind
these different cryptocurrencies is known as blockchain technology. Cryptography is used to
record the chain of custody of the various blocks of data [3]. The term chain of custody refers
to a ledger like system and blocks refer to the coins themselves. Bitcoin and its blockchain
technology also acknowledges that it operates on a decentralized sense of authority [3,6]. This
prevents any one user or group obtaining control of the whole system. The challenge with this
specific type of emerging technology is, how can an individual or company convince the public
that such an electronic method will continue to keep their funds secure?
Aside from companies that are trying to perfect their own digital currency, Apple and
Google have also made their presence known in this semi-cashless era. The two have made it
possible to access funds through a mobile phone app within retail stores worldwide. Ghita Erling
also analyzed how mobile phones have increasingly allowed for such payments to be made

possible [4]. M-Pesa, as mentioned earlier, incorporates mobile phones into their system to
achieve their goals of making access to money easier. Mobile phones now have the technology to
determine your location which allows for a more accurate display of available goods and services
throughout your area. The challenge with Apple Pay and Google Wallet; however, is when
talking about a cashless society, these two methods of payment are still tied directly with cash,
just as a normal debit or credit card is
I surveyed seventy-four random people using Google Forms to get an opinion of those
around me. The survey was only comprised of three questions which asked how old the survey
taker was, did they prefer an electronic or cash transactions, and whether they believed a cashless
society was feasible or not. Social media was also used to promote the survey. The results of the
survey are presented below.
How old are you?

Do you prefer cash or some sort of electronic payment?

Do you think a cashless society could exist?

Based on these results we can come to the conclusion almost everyone prefers to use an
electronic form of payment over cash. However, the idea of whether a cashless society could
exist is a toss up. This small sample alone exemplifies how people around the world are aiming
towards a cashless society while others believe cash will never go away.

Solutions
In order for emerging technologies to have a continual impact on how we process
payment transactions, we should continue to let the two evolve with one another. Trying to

develop an immediate cashless system to be put in place of current payment systems is only a
pathway to failure. The companies Bitcoin, Mintchip, Apple Pay, and Google Wallet that we see
today could only be stepping stones for what is to come in the future. If companies as such keep
up with the promises put forth as well as provide continual innovations, the public might be more
willing to change the way they go about their everyday payment transactios.

Sociotechnical Systems
How we interact daily with our debit and credit cards leads me to the next finding. The
relationship we have developed with these small plastic cards is unique and almost inseparable. This idea
comes from the Actor Network Theory (ANT). More specifically, the ANT states that it is a set of ideas

developed both in theoretical and empirical studies that share the premise of the inseparability of
the social and the technological [11].

Challenges
Most people have become accustomed to debit/credit cards so much, it makes it that much harder
to introduce a newer technology to substitute our current payment methods. Our interaction with debit
and credit cards has stabilized in its own actor network. An actor network is comprised of existing
technologies on which the technology relies, social institutions that finance, support, and maintain the
technology, users who appreciate the potential of the technology, and many other elements [11]. This fact
alone contributed to Mondexs failure. Mondexs actor network comprised of human and nonhuman
aspects failed to stabilize and people ultimately decided they did not need the technology since they could
not obtain a major benefit from the technology, as well as primarily that the technology was not socially
adopted. The same idea can be applied to companies attempting to create their own currency. If the
technology is too out of the norm, it will most likely be rejected at first response. Just as we have adopted
credit and debit cards, the same adoption process will need to take place for any other medium that
attempts to replace cash. Felix Stalder gave a great example of this theory in his article Failures and

Successes: Notes on the Development of Electronic Cash. Drivers need gas stations as much as gas
stations need roads. One needs the other and one also can cause a change in another. One reason Apple
Pay and Google Wallet have seen success is because they do not entirely eliminate the cash aspect from
the scene. They also have gained support from various retail stores which the technology can rely on, as
well as consumers who approve of the technology and look forward to seeing even more improvements.

Solutions
There is no general solution to the topic of sociotechnical systems and their actor
networks. Time and human adaptation are the underlying factors in whether certain technologies
become used on a mass scale or not. The Technology Acceptance Model illustrates this very
easily [Figure 1][1]. Forcing these adaptions to take place will potentially result in the same
troubles that Mondex experienced.

Conclusion
A cashless society is very feasible and in fact will soon be here one day. With the rate that

technology is progressing, it is only a matter of time before we see such a thing. There are many
implications that would arise if we did see cash leave the scene.
1. We would first and foremost have to consider would it be a worldwide thing or something
that was regional. Rates of the development of technology vary tremendously by country
and the cost of necessary computers and software could be very expensive. The education
rate plays a role as well. A study done in Ghana on the adoption of internet banking
services, which would only make sense to come along with a cashless society, suggested
that internet banking services should be targeted at the educated as the illiterates might
not be able to operate computers comfortably [1].
2. If a cashless society were to come to America, everyone would need to be accounted for
so that each and every person is provided with the tools to make use of the new system.
Thirty-million Americans are without bank accounts [10]. Giving everyone some form of
a bank account could be costly, but it could be a good thing in the long run. In 2014, there
was $130.6 million worth of assessed tax, penalties, and interest from tax returns filed
with additional tax due. The total amount of taxes filed with additional tax due increased
to $137.2 million in 2015 [8].
3. The idea of the government being able to catch up on their tax collections leads me to
another heavily debated topic among a cashless society. If the government could collect
money owed for taxes, would our money really be safe? It would be a strong battle
between convenience and privacy essentially. The new technology could be advertised as
the best thing yet, but it could come at the cost of some of your privacy. Some even say
today that convenience is winning that battle [11]. We can also ask would even the
government oversee such a thing or would we transform our modern day banks?
4. A cashless society would also most likely be associated with a lowered crime rate. People
would be less enticed to commit robberies. Though the crime rate might lower within the

streets, it could potentially increase within the technological and online aspect. A mixture
of bank and card providers give hackers endless options of who to attack, while one
uniform electronic currency places one large target on its back for criminal activity.
Payment transactions will continue to evolve and improve at the same time. Only time will
tell if a cashless society becomes existent. We, as humans, can only continue to let the social
and technical do as it pleases.

References
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Of Internet Banking In Developing Economies." Journal Of Internet Banking &
Commerce 20.2 (2015): 1-11. Business Source Complete. Web. 2 Apr. 2016.
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Demand For Physical Cash." Journal Of Payments Strategy & Systems 7.4 (2013): 359369. Business Source Complete. Web. 18 Apr. 2016.
3. de Meijer, Carlo R. W. "The UK and Blockchain Technology: A Balanced Approach." Journal
Of Payments Strategy & Systems 9.4 (2015): 220-229. Business Source Complete. Web.
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4. Erling, Ghita. "Cash Is Dead, Long Live Cash." Journal Of Payments Strategy & Systems 7.1
(2013): 43-49. Business Source Complete. Web. 27 Mar. 2016.
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(2015): 357-382. Business Source Complete. Web. 18 Apr. 2016.

7. Internal Revenue Service Data Book, 2015. Washington, DC: Internal Revenue Service, Mar.
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Bethesda, MD: Association for Financial Professionals, Mar. 2015. PDF.
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