Over the last six years, Americans have increasingly been turning towards debit and credit cards as they often find digital transactions practical and appealing. Yet, an entirely cashless society will come with significant drawbacks as the line between security and privacy grows thinner.
Supporters of non-cash payment methods often cite tax evasion and crime as inherently cash related issues, an argument that has pushed a number of governments to take measures against high-denomination notes. For example, the European Central Bank (ECB) has decided to phase out the €500 by 2018, supposedly to discourage criminality. Similarly, some believe that the elimination of the US’s largest denomination – the $100 – will cause a significant dent in criminal activities. But growing cases of online fraud and identity theft are proving this theory has its flaws and it’s not the disappearance of the $100 that will push criminals to clean up their act.
Besides the comfort and privacy it brings, cash is a necessity for 9.6 million unbanked US households who either choose to keep their transactions private or lack the necessary credit history or documents to open a bank account – often a problem that affects the poorest segments of the population.
There are many reasons why cash is still relevant in a country as diverse as the United States. Some reasons are as important as accommodating to those who cannot open a bank account, who choose keep their spending habits private or who feel secure when having back-up money in the event of a natural disaster. There are also more sentimental reasons, such as giving money to street performers, graduation cash necklaces, birthday card money or a child’s first tooth fairy gift.
Hopefully, while moving forward, the US will prove it can efficiently manage both digital and physical currencies, realizing the benefits of both methods of payment.
To read the Chicago Tribune’s original article, please click here.