Digital payment methods are becoming increasingly prevalent, especially in Northern Europe. Indeed, according to the Swedish central bank, cash payments accounted for only 2% of transactions in 2015. The transition to e-payments has been mainly supported by the arrival of new applications and services on the market and because of their availability across the country. Indeed, even churches now accept donations via mobile transfers.
In the framework of a social experiment, Dr Michael Collins, assistant professor of Social Policy at the University College of Dublin, tried to live without cash during one month to see if Ireland could become cashless in a near future and follow the example of its Scandinavian neighbour. His investigation demonstrated that almost all transactions can be done without banknotes and coins, except for some small value transactions, such as a coffee in a train. This is mainly due to the recent arrival of Android Pay and Google Wallet apps which allow consumers to pay for goods with their smartphone. Collins recognized, however, that some transactions could never be done electronically, for example when it comes to giving pocket money to a child.
Besides, the cashless society has some unsettling downsides. Indeed, the whole system is dependent on technology, meaning that in the event of a breakdown, everybody would be left without a backup solution. In addition, low-income consumers that cannot afford a smartphone, unbanked people and older consumers not used to digital instruments would be completely left behind. Finally, as retailers might decide to raise the price of goods to pay a fee for each card payment, they might decide to transfer the increased transaction costs to the customers by raising the prices of goods.
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