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Cash 2
Cash 2
Cash 2
Cashless payments[edit]
Main article: Cashless society
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Cashless society can be defined as one in which all financial transactions are handled through
"digital" forms (debit and credit cards) in preference to cash (physical banknotes and coins).
Cashless societies have been a part of history from the very beginning of human existence. Barter
and other methods of exchange were used to conduct a wide variety of trade transactions during this
time period.[23]
Since the 1980s, the use of banknotes has increasingly been displaced by credit and debit cards,
electronic money transfers and mobile payments, but much slower than expected. The cashless
society has been predicted for more than forty years,[24] but cash remains the most widely used
payment instrument in the world and on all continents. [25]: 14 In 17 out of 24 studied countries, cash
represents more than 50% of all payment transactions, with Austria at 85%, Germany at 80%,
France at 68%. The United Kingdom at 42%, Australia at 37%, United States at 32%, Sweden at
20%, and South Korea at 14% are among the countries with lower cash usage. [25]: 27
By the 2010s, cash was no longer the preferred method of payment in the United States. [26] In 2016,
the United States User Consumer Survey Study reported that three out of four of the participants
preferred a debit or credit card payment instead of cash. [27] Some nations have contributed to this
trend, by regulating what type of transactions can be conducted with cash and setting limits on the
amount of cash that can be used in a single transaction. [28]
Cash is still the primary means of payment (and store of value) for unbanked people with a low
income and helps avoiding debt traps due to uncontrolled spending of money. It
supports anonymity and avoids tracking for economic or political reasons. [29] In addition, cash is the
only means for contingency planning in order to mitigate risks in case of natural disasters or failures
of the technical infrastructure like a large-scale power blackout or shutdown of the communication
network.[30] Therefore, central banks and governments are increasingly driving the sufficient
availability of cash. The US Federal Reserve has provided guidelines for the continuity of cash
services,[31] and the Swedish government is concerned about the consequences in abandoning cash
and is considering to pass a law requiring all banks to handle cash. [32]
Costs of payment[edit]
An analysis by the Deutsche Bundesbank in 2017 found that a cash payment in retail costs an
average of 24 euro cents, while payments with a girocard cost 30 cents (or often 0.3 to 0.4% of sales
plus a transaction fee) and with a credit card charge one euro which is included in the sales price.
[40]
This is why retailers often refuse to accept card payments below a minimum amount. Depending
on the account model, there are also booking costs for the account holder with an average of 35
euro cents charged for each(!) account posting. Because of this convenient source of income,
commercial banks and credit card companies favor cashless payments.
In the case of cashless payment transactions, in addition to the documentation of the payment itself,
the personal details of the payer are usually linked to the data of the payee according to the Know
Your Customer (KYC) principle. This enables the payment process to be precisely traced for the
payer and the payee. The constant increase in digitization leads to a more detailed recording of
cashless payment transactions and their evaluation for advertising and marketing campaigns. Since
this digital documentation is usually more centralized than before, the potential for abuse increases.
On the other hand, the cash transactions are anonymous, unless purchasing profiles are recorded
with the help of loyalty programs based on customer cards, and keep the payment landscape
competitive.[41]
Credits to : https://en.wikipedia.org/wiki/Cash