How the Underbanked Can Prosper From Going Cashless

Majority of the transactions today are basically operated through the use of cash. The world
has not yet come to that phase of civilization where everything can be done electronically. Despite
the advent of commercialized and electronic payment methods, there is still a big portion of the
world’s population which remains unbanked. Ed Mclaughlin, Mastercard’s chief emerging payments
officer, stated that cash is causing 1.5% drag on economies. This means that economies around the
globe are spending big amounts for the handling and management of cash circulation. The long-been
proposed advancement scheme for transactional efficiency is going entirely cashless.

One of the advantages of cashless economy is easy transactions. People will not have to
carry loads of cash to make purchases or other transactions that involve payment of money.
Electronic devices like my mobile phone may be an efficient tool to do transactions and at the same
time avoid the possibility of theft. Moreover, transaction records can be encrypted which means
that they will not likely bear the risk of physical deterioration or loss. This also makes them easier to
be monitored anytime. Lastly, the central banks will not have to appropriate a big portion of the
government funds to print bills and mint coins for general circulation.

However, the people under a cashless society may find the risk of cybercrimes as top
disadvantage of this system. Financial accounts and information may be hacked and transferred.
Secondly, if an emergency occurs and the system is undergoing a maintenance service or
troubleshooting, it would be hard for the consumers to access their financial accounts. Technical
glitches and unexpected power outage are threats for this electronic payment model. So, in my
opinion, it is not yet time for the world to implement cashless system especially because the top
concern here is financial security and equality.

Furthermore, while cashless economy may likely sound convenient for the banked
population, I think it may appear otherwise to low income earners who do not have bank accounts.
In my stance, this scheme is not yet feasible considering the percentage of unbanked population and
of illiteracy in the world. Not everyone earns high enough to avail a bank service or is literate enough
to understand how to use cards or electronic devices in a transaction. Certainly, a lot of people still
cannot afford bulk sales—this is why we have local stores that make their services available to
consumers who only have meager means. I think it is impractical to swipe a card for a purchase that
does even exceed a dollar. This is where inequality strikes, or say, apartheid in the new generation.
The underprivileged class will not likely enjoy the benefits of the proposed cashless economy.

In conclusion, to at least decrease the rate of poverty and illiteracy which make cashless
economy not yet feasible at present, I opine that the world governments should go the extra mile
first in educating their citizens and in giving them more accessible opportunities to make their lives
better. Poverty and illiteracy have been existing long enough that the world seems to be already
used to it. That being said, poverty and illiteracy will forever exist. Therefore, if converting the
society into an entirely cashless institution which technically favors the privileged is not yet possible,
maybe a fairer scheme for the underprivileged should be advanced too.