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Cashless Economy

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Le Hoang Long Mr. S. Garbus Economics, block C 26 Jan. 2011 MOVING TOWARD CASHLESS ECONOMY Moving toward a cashless economy is an important subject that has been argued recently because of the significant increase in the number of people who rely on electronic banking, debit cards and credit cards when they purchase goods, pay for services or transfer money to other people or organization. Although electronic banking has the aid of the developed technology to satisfy either financial system and their customers, it still cannot totally replace cash, since cash has it own benefits which help avoid some electronic banking problems. In fact, we cannot deny many advantages of the electronic banking system. From the graph of "Non-cash payment, 2003", we can easily find that about 55% people chose to use credit cards, debit cards and other electronic methods of payment instead of using traditional checks. ...read more.


It becomes especially in nowadays, since time is gold. Moreover, credit cards help people to purchase goods and pay for services at anytime even though those people don't have enough money at that time. Despite all of the advantages of electronic banking, cash is still irreplaceable in our everyday life because of it's own benefits. In developed countries such as America or Europe countries, people may by their breakfast, or just a cup of cafe, or even by a car using credit cards; but in the other parts of the world, especially the "third-world", cash is still the dominance. For example, in Vietnam, where debit cards and credit cards are going to be popular, the working class people, or common people, still cannot buy food in the market or pay for transportation such as "xe om" or "xich lo" on the street without using cash. ...read more.


Also there are situations which payment or transaction cannot be done because of hardware problems. Karl Flinders reported about electronic banking crash of Barclay, a famous bank in the U.K. On Monday 26 October 2009, millions of Barclay's customer were unable to use electronic banking services, such as ATMs, online banking, payment using debit or credit cards; as a result of technical system problem. One customer complained that there were lots of different error messages when she used bank online. Another one said customers cannot do anything in the branches either. It shows that we cannot totally rely on the electronic banking. In conclusion, changing toward a cashless economy is not a good decision for any government. The popularity of electronic banking, debit and credit card would benefits many countries' economy, but the extinction of cash is impossible. ...read more.

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