Denway, Norway and Sweden are leading the charge towards cashless societies. Yes, digital wallets are the future indeed. According to USA Today, 90% of monetary transactions in Denmark take place digitally. In the US, that number is a mere 45%. Denmark will be an all digital society as early as this year. The US is catching up but we’ll get there eventually.
Why will all money soon be digital? For many reasons. First, it’s cheaper for governments to go digital. Coins and bills are expensive to produce, expensive to process and expensive to replace. Speaking of bills, Bill Gates is also urging governments to go paperless. Mainly for societal reasons such as a drop in physical crime when someone tries to steal someone else’s money.
So now we’re saving money and saving lives. On a practical level, digital currency seems to make sense. But what, in reality, would a society using 100% digital currency look like?
Being in an ever more germ conscious society, going paperless means we wouldn’t have to deal with grimy coins and bills that have been through the hands of many. Let’s just say not everyone washes their hands before exiting the restroom…
Tax evaders will also be easier to spot. What happens a lot is people don’t report cash transactions. Someone can buy a vehicle with cash for $10,000 and the seller can offer to write $1,000 on the bill of sale in order to close the deal. Then the buyer only has to pay sales tax on $1,000. If all payments were digital, this would make it much harder to escape taxes. That sounds like a bad thing but for society on the whole, it would be good. Waiters would be held accountable for paying tips as well. Tax evaders could become a thing of the past. No doubt, saving the US government (ourselves) billions annually.
Instead of paying with cash, for private party transactions, we would just send the money electronically. Think PayPal but much faster in the future. And everyone will have a PayPal account or equivalent.
Digital wallets can be used instead. Examples of such wallets include Lemon Wallet, Google Wallet, Apple Pay and Square Wallet. Instead of worrying about carrying the right amount of cash – or even carrying around credit cards, all you have to do is remember your phone. And since most people feel naked without their phone – it’s easy to remember your wallet.
You may be wondering what we will do instead of going to banks. Well turns out, most of us never need to visit a bank again. From ATMs, you can even cash and deposit checks. And for added convenience, many stores let you cash checks (some for free). As you can see, physical bank locations will soon only exist in our memories.
It’s amazing how digitized the world is becoming. Not long ago, you’d have to leave your house with a massive wallet, a clunky cell phone, a palm pilot and a bunch of keys. Now you can have everything you need with just a smartphone and a proximity key for your vehicle.
What kind of currency will we be using then? USD? Bitcoin? How about a combination of both?
While this is getting a bit ahead of ourselves, there may eventually become a global currency (think of what the Euro is for the EU). Since we’re becoming a global society, this makes sense. There will be no more exchanging currency, no more price conversions, no more hassle. It’s one reason Bitcoin is so popular. It’s valued the same everywhere you go.
For now, each country will go more and more digital. Then making the switch to a universal currency will be much easier. People who like paper will unfortunately have to forget about it. Some people like budgeting with paper bills. This will have to change. Though it’s easy to setup spending categories in a plethora of personal finance apps.
There are some concerns with a digital banking system. Security is on the top of that list. Many people today feel like if they can see and touch their money, it’s safe. The technology of digital currency is confusing to many. This will need erased through public education and time.
For all of the above reasons, I embrace all things digital. I’m preparing for the future. I store documents in the cloud and almost never carry around paper bills. What about you?
Are you ready to embrace the world of digital currency?