Australia is only a few years away from becoming a cashless society for around 20 years, but it will get there eventually. Legislation currently before the Senate aims to ban transactions above $10,000 in an effort to hamper the underground economy. From here, it’s not hard to imagine that the ubiquity of digital payment systems – and government efforts – will lead to the demise of hard cash at some point in the future.
One of the supposed benefits of a cashless society is that it reduces crime, the logic being that the less money there is to steal, the less money is stolen. Laundering dirty money is also more difficult because every transaction is recorded in one form or another.
But a cashless society has a number of downsides that may well outweigh the positives.
“Hackers and other criminals now have new ways to access accounts and potentially create synthetic accounts to facilitate more sophisticated money laundering activities.”
And this is precisely the risk posed by pirates. A cashless society could increase the risks of financial abuse, according to the UK’s Access to Cash report. Older people, who may not understand digital technology, would be particularly vulnerable. Couples with joint bank accounts are also at risk: money can be tracked and controlled by one person. These problems are already very concerning, but they would be even worse in a cashless society.
This is not to say that digital systems rely on top-notch digital infrastructure, which Australia doesn’t really have in spades. This infrastructure must also be more or less impervious to cyberattacks, which can be perpetrated by state-sponsored actors with an interest in crippling a country’s entire financial system. Faced with this existential threat to the economy, a little money laundering doesn’t seem like such a big deal.
A cashless society could also make the situation worse for workers and the most vulnerable. There is only a small step from the cashless system to the cashierless system, and a cashless society would face an explosion of low-skilled unemployment.
At the same time, those who do not have access to banks – or prefer not to use them – are also at risk.
“Let me emphasize that one of the concerns with the transition to a cashless society – at least as we move to that state – is the ability of the underbanked or unbanked to have sufficient access to function properly as they would in a cash-based system. » said Dr. Harmon.
“This would be a major concern from a societal point of view. »
The idea of a cashless society is promising. But that promise hides a number of caveats that any country – let alone Australia – would be foolish to ignore.
