Uploaded by Ahmad Ghazanfar

Cashless transactions

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Electronic payments are better than cash payments and we should become a cashless
society
Introduction:
When the credit card technology was made, it was seen as a revolutionary product since people
did not to have cash with them. Humans had been using cashless payment methods for financial
transactions prior to credit and debit cards as well like cheques or promissory notes however, the
reason behind the success of the cards was convenience more than anything else. As time
progressed, there were other modes of payment like mobile apps that can do the job as well as
technology called NFC which uses smartphones. There is a debate now as to whether the society
should become cashless or not. This essay argues that it shall be prudent to move to a cashless
society due to the benefits that cashless transactions have.
Thesis statement: Although there are concerns like fraud and cyber-attacks in cashless
transactions, it is better to transfer to a cashless society since it’ll have environmental benefits, it
will stop the spread of diseases like Covid and boost economic growth.
The currency that we use needs to be manufactured and there is a cost to be paid by the
environment. For instance, if we look at the manufacturing of coins, most people do not recognize
how damaging it is for the environment. These coins are made from nickel and nickel mining has
a lot of environmental concerns. When a nickel mine is operated, it has severe ramifications for
the soil nearby as it reduces soil fertility and prevents tress from growing on it (Prematuri,
Turjaman, Sato, & Tawaraya, 2020). Further, there are countries that are switching to polymer
notes and that has a bad impact on the environment. Bank of England for example, stated that the
notes would be recycled and be environmentally sustainable but they are not since they release
more carbon emissions than the previous notes (Keating, 2019). Thus, cashless transactions can
be an alternative to solve the problem of mining pollution and carbon emissions.
Another way that cashless transactions are better than cash payments is because of hygiene. The
recent covid pandemic and the restrictions that ensued as a consequence, taught us just how
vulnerable we are to the spread of diseases through microorganisms. The lockdown during the
pandemic caused the people to use cashless transactions to buy things of daily usage as opposed
to cash. For the future, it is essential that cashless transactions be the norm so as to stop the spread
of not only covid but other diseases. This is more important for the developing world as (Uneke &
Ogbu, 2007) conducted research in Nigeria where they collected currency notes from the major
cities in Nigeria. When the notes were subjected to parasitological analysis, it was found that the
all of the currency notes were contaminated both by parasites and bacteria. These notes are health
risks and put people in danger.
The third advantage that cashless transactions have over cash transactions is that they tend to result
in massive economic growth. Research was conducted for 27 European countries to find out of
there is a relationship between retail payments and economic growth and the retail payments tend
to increase as the mode of transactions gets cashless. Not all cashless payment methods drive this
economic growth however, but card payments tend to have this effect on economic growth in
countries (Hasan, Renzis, & Schmiedel, 2012). This same trend was seen in a study conducted by
(Zandi, Singh, & Irving, 2013) where data from 57 different countries was analyzed. The results
showed that there is increased economic growth in countries which use cashless payments
methods. Much of this comes from the convenience that is offered by cashless transactions for
example, when going to a store, the payment can be made for an exact amount and neither the
customer, nor the business owner has to be worry about change.
Counterarguments:
While it is true that there is some environmental damage while manufacturing currencies but the
impact that cashless payments will be far more. Many reports have pointed out that digital
currencies like bitcoin use a lot of electricity and that is harmful for the environment. For example,
bitcoin uses more electricity than some countries like Finland (Huang, O’Neill , & Tabuchi, 2021).
As to the matter of cash transactions spreading diseases, the evidence is not very credible since the
presence of bacteria or parasite on notes does not mean that there is a living organism on the
currency note (Scaria, et al., 2014 ) and also, cashless payments increase useless consumption
which could also increase health risks (Park, Lee, & Thomas, 2021). Plus, increase in cashless
transaction increases economic growth but it will increase risk of fraud through things like identity
theft.
Rebuttal:
The environmental concern related to energy comes down only to bitcoin which is a meager part
of a cashless society rather than being the base. The increased usage of cashless transactions will
be good for the environment since it will use smartphones which are already a readily available
commodity hence reducing the carbon footprint. Secondly, whether or not there are bacteria on the
currency notes, covid is still a thing and we need to prevent it which requires cashless transaction
plus, there is a work from home policy in place increasing the importance of cashless transactions.
Identity theft and fraud may be an issue but cashless transactions overall make accountability and
paper trails better and reduce money laundering.
Conclusion:
A cashless society is the way forward. As this essay has demonstrated, cashless transactions have
many advantages like the fact that they will help reduce the carbon footprint associated with
manufacturing of currencies around the world, it will help not only to stop the spread of diseases
like covid but also help and facilitate those people who are working from home and it is also a
good move for freelancers. This will also boost economic growth in addition to reducing the risk
associated with cash like money laundering.
References
Hasan, I., Renzis, T. D., & Schmiedel, H. (2012). Retail payments and economic growth.
Helsinki: Bank of Finland.
Huang, J., O’Neill , C., & Tabuchi, H. (2021, September 3). Bitcoin Uses More Electricity Than
Many Countries. How Is That Possible? The New York Times.
Keating, D. (2019, August 21). England's New Currency Is Harming The Climate - Report.
Forbes .
Park, J., Lee, C., & Thomas, M. (2021). Why Do Cashless Payments Increase Unhealthy
Consumption? The Decision-Risk Inattention Hypothesis. Journal of the Association for
Consumer Research.
Prematuri, R., Turjaman, M., Sato, T., & Tawaraya, K. (2020). The Impact of Nickel Mining on
Soil Properties and Growth of Two Fast-Growing Tropical Trees Species. International
Journal of Forestry Research.
Scaria, V., Ramachandran, S., Jalali, S., Kohli, S., Latka, C., Bhatia, S., . . . Sivasubbu, S. (2014
). Screening Currency Notes for Microbial Pathogens and Antibiotic Resistance Genes
Using a Shotgun Metagenomic Approach. PLOS ONE.
Uneke, C. J., & Ogbu, O. (2007). Potential for parasite and bacteria transmission by paper
currency in Nigeria. Journal of Environmental Health, 54-60.
Zandi, M., Singh, V., & Irving, J. (2013). The Impact of Electronic Payments on Economic
Growth. Moody's Analytics .
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