We\u2019ve all done it at some point \u2013 tapped our card, phone, or watch at the checkout without thinking twice. But in the background, there\u2019s an additional cost of this convenience that few people ever consider.<\/p>\n
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Paying with cash reportedly causes psychological discomfort, as we\u2019re constantly aware of what we\u2019re spending, known as the \u201cpain of paying<\/em>\u201d by some researchers. Their studies show that when we pay digitally, we pay much more carefree and feel less friction. In real terms, research has shown that mobile payments lead to 9% higher transaction values and 11% higher payment frequency when compared to cash. And more than half of Americans now say their primary payment method is digital rather than traditional. [Source: TIME<\/em><\/a>]<\/p>\n Essentially, using modern ways of paying bypasses our hardwired financial senses, meaning we\u2019re all silently becoming more comfortable with invisible spending.<\/p>\n Cashless: Convenient or Controlling?<\/strong><\/p>\n With technological progress taking us effortlessly towards a cashless society, we are already seeing a subtle but serious loss of control. We need to remember that every scan, swipe, and tap is tracked, logged, and now even monetised.<\/p>\n Your spending data is used to create a financial profile, and to target you. Governments have access to your transactions \u2013 whether directly or upon request \u2013 and all of this connects you to traceable spending habits. Along with AI analytics, everything you buy now creates a living profile that reveals more about you than you might expect, including what you value, where you go, and when you might be most vulnerable to advertisements.<\/p>\n \u201cUnlike cash transactions, digital payments leave a footprint that governments,<\/em> corporations, and financial institutions can track. This level of surveillance leads to<\/em> concerns about how transaction data is exploited.<\/em>\u201d [Source: Wavetec<\/em><\/a>]<\/p>\n Social Credit Systems: China\u2019s Cautionary Tale<\/strong><\/p>\n China, being ahead of the West in terms of cashless implementations, offers warning signs of where this path could lead us. Under their Social Credit System, people are scored on every transaction they make \u2013 and everything they do. Combining financial and social statistics with additional state control means spending too much or too little on certain goods can affect a person\u2019s standing. Starting as simply as missing bill payments or buying too many video games could reportedly lead to job application restrictions or limited access to flights and trains.<\/p>\n And it started with a trackable, cashless society.<\/p>\n In the West, we may not see these systems in action yet, but the infrastructure that enables such an environment is falling into place. Think about the reduction of ATM availability, real-time payment analytics, digital IDs, and the ever-increasing capabilities of public surveillance. The tools are already here.<\/p>\n Designed Exclusion<\/strong><\/p>\n Not everybody finds a cashless world convenient. A UK finance report in 2023 found that elderly, disabled, and low-income people were the most reliant on cash payments, accounting for 12% of all transactions. [Source: Financial Times<\/em><\/a>]<\/p>\n With the declining ATM and high-street banking networks, and an increase in businesses exclusively accepting digital payments, are we at risk of limiting who can still use their money? If everybody needs access to apps and higher tech literacy \u2013 we will see an exclusion of some of our most vulnerable citizens. Not everybody has equal access to a digital world, potentially leading to an offline underclass in our society.<\/p>\n It\u2019s Actually Quite Fragile<\/strong><\/p>\n Cash works without electricity, signal, or permission. By contrast, digital payments rely on tech infrastructure \u2013 infrastructure that can easily break. Power outages, cyber attacks, or system failures can block people from their money completely.<\/p>\n