Is “Cashlessness” The Way to Go? – Cashless Payments Around the World

With the astonishing speed of advancement in the data technology (DT) field, it is a much more common scene to see people walking around without their wallets. A smartphone with one (or a couple) mobile payment app will do. However, while the world seems to be moving towards a cashless society, different countries around the world have different approaches on cashlessness that are tailored for their own economies.

future of payments

Infographic charting global payments, number of cashless transactions worldwide, contactless cards issued by region, and countries with the highest proportion of cashless transactions.


You might have heard from the news or through a friend about how China is moving towards a cashless society very quickly. This is true in the cities and some more developed rural parts of the country. Dominated by Alipay (owned by Alibaba) and Wechat Pay (owned by Tencent), one doesn’t even need to bring anything other than a smartphone when he or she goes out. From making a doctor appointment and paying utility bills to buying a drink and renting an umbrella in the subway, almost anything you can or can’t imagine can be done through mobile payment apps. Different from most developed countries’ cashless payment systems, Alipay and Wechat Pay have the distinct QR code when making a direct purchase, which is one of the main reasons why mobile payment became so prevalent so fast throughout China. With the cost of generating these QR codes so low, basically every retailer and vendor can afford to support mobile payment because it doesn’t need to purchase a sensor that services like Apple Pay requires. Also, using a QR code frees the limit of having to own a certain brand of smartphone. For example, if you want to use Apple Pay, you have to have an iPhone, and the same logic applies to Samsung Pay and Google Pay. However, the limitations of using mobile payments in many developed countries don’t exist in China because of the universal nature of QR codes.


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United States

The United States has had a long history of using cashless payment methods, and credit cards have to be among the most widespread ones. With the first official bank-issued credit card emerged around the 1950’s, the United States has one of the most well-established credit card system in the world and the majority of households have at least one credit card. Therefore, using a credit card has become the spending habit of most adult American citizens, which made transitioning into using mobile payment apps for direct purchases a more far-fetched reality. However, in the past ten years, many new P2P money transfer platforms like Venmo and B2B platforms like WePay have emerged. This new trend has allowed individuals and businesses to freely transfer money to each other without the limitation of one’s (mobile) operating systems as mentioned above. Although the United States and China both have emerging markets for such kinds of payment platforms, the U.S. is taking a rather different route than China. As it has a way more deeply rooted credit card culture, platforms like Venmo and Zelle choose to stay in the service of payments between individual bank accounts rather than acting as a means for direct purchases. Last year, Venmo even introduced its own debit card that is linked to the customers’ Venmo account in partnership with MasterCard.




Venmo’s new debit card that is linked to your Venmo account.


As the circulation of coins and notes has dropped to its lowest level since 1990, Sweden is one of the most cashless societies in the world. With 99% of adults having made or received a noncash payment, Sweden is definitely a pioneer in cashless revolution. However, lawmakers in Sweden are pushing to slow down the development of a completely cashless society with concerns such as the difficulties of coping without mobile phones or bank cards and people worrying about the possibility that digital payment systems would suddenly crash. The Parliament was in the process of changing the central bank law to require banks to make cash withdrawals available for 99% of Swedes within a maximum distance of 16 miles.




Sweden is leading the cashless revolution with 99% of adults having experienced a non-cash payment.


Unlike most of the countries with developed banking or mobile payment systems, India chose to take a different approach on cashless payment. Since India only has a smartphone penetration of 26% as of 2018 with the majority of people still unbanked and 270 million people still below the poverty line, using Internet-assisted mobile payments or bank cards seems like an unrealistic method. Therefore, the government sought to help its citizens with an easier way to mobile banking through SMS messaging etc., which enables even people in poverty to enjoy the convenience brought by cashless payments.

Concerns and Challenges of Going Completely Cashless

Besides the obvious benefits of having cashless payment technologies, there are also many emerging concerns and challenges that this trend has brought to the world, which should be considered before governments and companies move forward in pushing for a completely cashless society.

The Unbanked

One of the biggest problems that comes along with cashless payments is the fact that there is still a huge population throughout the world that still remains unbanked. As of 2017, roughly 70% of the rural Chinese, which is estimated to be 200 million people, still doesn’t own any banks cards, and some of them don’t have a smartphone either. Even in some developed countries like the United States, there are around 8.4 million households, which is roughly 14.1 million adults and 6.4 million children, that are left out of the official banking system. These numbers raise a warning sign that if countries keep heading towards a cashless society, the unbanked population would likely be left behind.



Privacy Concerns

Another big concern that people have about mobile banking and payment systems is that transactions made through these platforms are easily traceable by the companies and the governments. Nowadays, people are more and more sensitive to their right of privacy. Therefore, the legislators should keep a close eye on the potential danger that can be caused by invasion of privacy and come up with corresponding laws to protect the citizens’ fundamental rights.

Frauds and Hackers

Along with the concerns on invasion of privacy comes with the risks of fraudulent and hacking activities. It is much easier to scam someone through online or credit card payment systems than to do so with cash. Similarly, many skilled hackers can effortlessly steal one’s money without him or her even noticing. Also, fraudulent cases online are a lot harder to be detected and solved by the officials than the ones in person which probably have more obvious evidence.

Spending Habits

Finally, speaking from the psychological perspective, it is a much more immediate sensation of loss if one chooses to spend cash. However, credit card, online, or mobile transactions make people more insensible of their spending behaviors, and we all know the feeling when you go online shopping and have way too much money spent before you even realize.



China Can’t Afford a Cashless Society

8 thoughts on “Is “Cashlessness” The Way to Go? – Cashless Payments Around the World

  1. Hey Yun! Great post! I have never really thought about it until reading this post but I find myself very rarely using cash while at school, I have a pocket on the back of my phone to carry my cards around and if I ever owe someone money I’ll just venmo them. Very little cash is ever exchanged in my life on campus, to the point that in the rare situation where I do need cash, I almost always have to withdraw from the ATM since I don’t keep it on hand. I honestly think it is better to use card or venmo when paying for things because it leaves an automatic paper trail, allowing for easier budgeting. It is wild to think about a time where electronic payment methods completely took over money and paper money seized to exist. I think that is still a far way away.


  2. Hi Yun! This post was great and so informative. When I was abroad last semester in Paris, so many transactions are utilized through card and especially with contactless card payments. So not only do you not need any physical cash, but to pay you just tap your credit card like we tap our IDs to get into our dorms. I can definitely understand the privacy and fraud concerns with most payments being done through this cashless method, but the risks seem to outweigh the benefits.


  3. Great post. While I new that the world was moving towards becoming a cashless society, I was unaware of how many people remain “unbanked” since that is usually a prerequisite for using a mobile cashless payment service. Your take on the psychological perspective is something I definitely relate to. When I Venmo someone a large amount, I certainly do not feel as bad about it compared to when I pay someone the same amount in cash.


  4. Great post Yun. Very informative post! I find that I never use cash but I always have some in my wallet “just in case”. Cashless is so useful when it comes to being able to use credit cards in other countries and not having to do lots of cash exchange and what not. I think cash always provides some peace of mind for people who have it but for people without bank accounts, cash is all they know as money. Loved your point about how psychologically it effects your spending habits. Very relatable.


  5. Yun, great post. This is something that I have really been interesting in learning more about recently. For probably the past 5 years now I have not carried any cash at all with me on a day to day basis. It will be interesting to see how in 5 years how close a cashless society might be. I was also really interested to read about the concern with the unbanked in respect to concerns for going cashless, as the numbers you presented were quite astonishing to see, especially in the US.


  6. I love this post Yun! Going cashless has quite an impact on me when travelling abroad. When I was interning in Paris for 2 months, I found myself using my credit card rather than exchanging US dollars to Euros because using card is so much more convenient. However when I was in China over the break, I found it aggravating that one of the stores I shopped at only took WeChat Pay or AliPay. I wish there was an universal platform paying system that’s accepted everywhere in the world.


  7. Great post Yun! I am a pretty big supporter of a cashless environment. Similar to many college students, I never have cash on me because it is much easier for me. One of the benefits that I have for going cashless personally is that if I lose my wallet, I can easily cancel my debit card and get a new one whereas if I just carried cash I would never get it back. Your concern for going cashless with many of the world being unbanked is very interesting and is something I have not given much thought. Great job!


  8. Solid post. I personally lived in China and experienced the convenience of the cash free aspect in day to day life. However, I’ve never thought about the potential negatives sides of a cash free society. Especially the point of how the rural side of China would be left behind. The ease of money transfer will continue to widen the inequality gap.


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