PAYMENTS

Cashless privacy concerns Privacy is another concern . A digital transaction can be tracked from start to finish – and , arguably , is therefore considered more secure . But not everyone wants every detail of their transactional life monitored and the resulting data used to ‘ profile their habits ’.

Anil Malhotra , CMO of the fintech Bango , told us recently : “ For most people , the main disadvantage ( of going cashless ) is the scrutiny that governments – and ancillary advisors and agents – can assert over an individual ’ s private activities . With trust in government and its officers at a low point in democratic societies with open economies , there are genuine concerns about government agents gaining greater insight into personal affairs .”

CASH-USING COUNTRIES

According to data from Merchant Machine

1 . Romania - 78 % cash transactions

2 . Bulgaria - 63 % cash transactions

3 . Kazakhstan - 60 % cash transactions

4 . Ukraine - 60 % cash transactions

5 . Egypt - 55 % cash transactions

Malhotra also expressed concern regarding the eradication of cash having an impact on people who are currently unbanked . He said : “ In the short term , in certain societies , cash is essential for financial inclusion . This is also true for certain demographic groups in all societies , such as older people . So , it follows that one disadvantage of losing cash could be the exclusion of certain groups from the mainstream economy .”

Mike Peplow , CEO of Paynetics , concurs : “ Cash also has the benefits associated with anonymity . You can pay someone without having to know them personally or know their bank details , and people may see this as less of a risk as no details are exchanged . On the same note , cash cannot be traced which some people find advantageous as they don ’ t want the state to know their full financial history .”

He continues : “ Electronic payments require a sophisticated infrastructure which , in some countries , is not yet available or is very expensive to access . This may mean it ’ s not possible to go cashless everywhere . There are also many people , particularly vulnerable people , who find budgeting with cash a lot easier than using electronic payments . And , for those without a fixed address or identification documents , you can use cash without having to undertake Know Your Customer ( KYC ) checks .”

Digital transactions are convenient The arguments for reducing cash use are numerous and valid . But the reduction in cash use has also occurred because digital payments are cheaper and more convenient for banks . For example , the cost of maintaining ATM networks is borne by banks , who then pass that on to their customers . As competition between banks rises , with neos

72 May 2023