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A quick tap of a credit or debit card to pay at most retail outlets have made it easier to get around without physical cash – banknotes and coins. In Belgium, France, and Canada over 90% of consumer payments are made by digital means.
The United Kingdom, Sweden, Australia, Netherlands, and the US also have high rates of consumer payments (80% and over) made via non-cash modes. Germany and South Korea also use cashless payments as the major mode of consumer payments. In the list of the top 10 cashless societies, the South Korea is the only Asian country. No country from Africa or South America is listed.
Recently, in India, Prime Minster Narendra Modi has implemented a shock ban on currency notes of higher denominations, a move referred to as demonetization. The Indian government is constantly encouraging people including small traders and daily wage earners to go cashless and reduce dependence on cash transactions and instead adopt digital payment methods. The move has been executed with the aim to curb the circulation of “black money” in the country and associated problems.
A recent report by a financial-services firm regarding cashless society says that digital money makes payments faster, reduces the size of informal economies and makes flows of money more transparent. Even small increases in digital-money usage promise big benefits for governments and businesses. However, even if a country is ready to go completely cashless, culture might get in the way and people might resist. For instance, although Germany ‘s digital money readiness is high, the “cashless intensity” of its economy is relatively low. In Australia there are 166 ATMs per 100,000 people, according to World Bank data. Other countries, such as Finland, where there are only 35 ATMs per 100,000, are more high-tech financially.
(To be continued) (Floro Mercene)