The Shift To A Cashless Society Is Snowballing

Tyler Durden's picture

Love it or hate it, cash is playing an increasingly less important role in society.

In some ways this is great news for consumers. The rise of mobile and electronic payments means faster, convenient, and more efficient purchases in most instances. New technologies are being built and improved to facilitate these transactions, and improving security is also a priority for many payment providers.

However, as Visual Capitalist's Jeff Desjardins explains, there is also a darker side in the shift to a cashless society. Governments and central banks have a different rationale behind the elimination of cash transactions, and as a result, the so-called “war on cash” is on.


Courtesy of: Visual Capitalist



The Federal Reserve estimates that there will be $616.9 billion in cashless transactions in 2016. That’s up from around $60 billion in 2010.

Despite the magnitude of this overall shift, what is happening from country to country varies quite considerably. Consider the contradicting evidence between Sweden and Germany.

In Sweden, about 59% of all consumer transactions are cashless, and hard currency makes up just 2% of the economy. Yet, across the Baltic Sea, Germans are far bigger proponents of modern cash. This should not be too surprising, considering that the German words for “debt” and “guilt” are the exact same.

Within Germany, only 33% of consumer transactions are cashless, and there are only 0.06 credit cards in existence per person.


The shift to a cashless society is even gaining momentum in Germany, but it is not because of the willing adoption from the general public. According to Handelsblatt, a leading German business newspaper, a proposal to eliminate the €500 note while capping all cash transactions at €5,000 was made in February by the junior partner of the coalition government.

Governments have been increasingly pushing for a cashless society. Ostensibly, by having a paper trail for all transactions, such a move would decrease crime, money laundering, and tax evasion. France’s finance ministerrecently stated that he would “fight against the use of cash and anonymity in the French economy” in order to prevent terrorism and other threats. Meanwhile, former Secretary of the Treasury and economist Larry Summers has called for scrapping the U.S. $100 bill – the most widely used currency note in the world.


It’s not simply an argument of the above government rationale versus that of privacy and anonymity. Perhaps the least talked-about implication of a cashless society is the way that it could potentially empower central banking to have more ammunition in “smoothing” out the way people save and spend money.

By eliminating the prospect of cash savings, monetary policy options like negative interest rates would be much more effective if implemented. All money would presumably be stored under the same banking system umbrella, and even the most prudent savers could be taxed with negative rates to encourage consumer spending.

While there are certainly benefits to using digital payments, our view is that going digital should be an individual consumer choice that can be based on personal benefits and drawbacks. People should have the voluntary choice of going plastic or using apps for payment, but they shouldn’t be pushed into either option unwillingly.

Forced banishment of cash is a completely different thing, and we should be increasingly wary and suspicious of the real rationale behind such a scheme.

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TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) May 19, 2016 9:04 PM

If I don't have cash how will I pay for hookers and blow :((

Tallest Skil's picture

You'll have to be satisfied with your government-sanctioned hookers and Monsanto®-approved blow.

38BWD22's picture



Hackers are going to love a cashless society.  

Look at the identity thieves, hackers into the banks, Linked-In, etc., etc.

Not to mention the .gov hacks...

Antifaschistische's picture

I just don't buy this more convenient angle.   Sure, if you have to go to an ATM twice a day to get a $20 out that's pretty annoying.  But the fiat regime is what makes it annoying.  If I had a $50 coins, and $10 coins and $1 coins.  That's all I'd ever need.  I never buy anything for less than a dollar anymore anyway.   Going to a coke machine and having to swipe a card is NOT more convenient than dropping 4 quarters into a machine.

but what if you're out of cash!!   this is part of the problem in our society too.  Freaking grow up and think ahead more than the length of a sitcom.

espirit's picture

Cue an EMP event.

...And it's Gone!

NoDebt's picture

I was talking with a friend of mine who runs an ATM management company on Wednesday.  Asked him about the whole cashless thing.  He expects he won't have a business to leave to his children.  Says the biggest problem is that there are almost no industry trade groups that have any sway to lobby FOR cash.  And the banks are all on the other side of this- they want it gone, too.

Game, set, match.  You will live in a cashless society within a generation.  Deal with it.


espirit's picture

Transaction fees will eat the little guy for lunch.

Back to Black-Market.

Billy the Poet's picture

Going cashless is on my non-compliance list.

Keyser's picture

I've said it here before and I'll say it again... Going "cashless" may work for roughly 750 million people on the planet, but what about the other 7 billion? It ain't gonna happen folks, but if it does in a country where you reside, my advice is to get the hell out and go someplace sane... 

Skateboarder's picture

I just bought beer with coins.  :-)

Knowing I don't smartpoop, my friends sometimes give me the witty response, "ok then, Venmo it to me," when I offer to pay for things on certain occasions (I usually like to pick up the bill wherever).

Among all my millennial late 20s early 30s friends, they all use Venmo and stuff - they're ready for the cashless economy. But we were also the last generation to grow up having physical change actually mean something, like bus rides were 35c, and pay phone calls were 25c before they became 50c. Everyone born before '90 has a connection with cash; everyone after is suspect... (don't take the generalization seriously...)

puckles's picture

Yeah, and I bought coffee in the commissary with coins the other day.  Lightened the incessant coin load a bit; the type of coffee I buy is $1.90.  I have both Gen X and millennial kids; two of the Gen X kids really understand cash.  The rest, not so much.

RaceToTheBottom's picture

Is it possible to snowball when you have global warming?

Grave's picture

enter bitcoin, game over for middlemen, banksters, etc

FedFunnyMoney's picture

One Carrington level solar flare and it all goes "poof". The most recent one was 1859.

Keyser's picture

Or a well placed EMP, which of course will be blamed on Russia or China, justifying the western MIC to kick into high gear... The result, 1/4 of the world's population vaporized... 

Automatic Choke's picture

barter will return.   hookers and blow will be paid for by sacks of potatoes, cans of tuna, and amazon gift cards.   (I'm stockpiling tuna as we speak).


bamawatson's picture

tuna for street pussy seems like a fair swap

Miffed Microbiologist's picture

My case of pre Fukushima tuna smells even better! But at some point if one is starving those things aren't really considered.


espirit's picture

Hey Miffed,

Better check that expiration date.

I ate my last case long ago.

(betting my canned butter & cheese from New Zealand will last forever)

Miffed Microbiologist's picture

Yes they are outdated but the cans still look fine. I'm tempted to crack one but I'm not sure if it is necessary. I purposely got packed in oil hoping they'd be tastier beyond their expiration but if too unsavory, my chickens would love the protein.


Billy the Poet's picture

I've been eating per-Fukusima salmon with expiration dates in the previous decade. No problem.

espirit's picture


Damn, you have a better constitution then my street cat.

Kirk2NCC1701's picture

Are you still talking about pink salmon, or just pink?


Bananamerican's picture

Miffed. Get Tonnino...It's caught in the Atlantic and it's awesome (if expensive at 5$ a can)

Paul Kersey's picture

chairman, have your women bathe once in a while.

Miffed Microbiologist's picture

Try working with genital cultures. The stench of what comes out of people can clear a room. That and anaerobes makes many microbiologists reconsider their career choice.


bid the soldiers shoot's picture

I cleared my hospital room every day for 7 weeks when my leg was in traction

Skateboarder's picture

Ten days of heavy duty backpacking and no bathing. Yeah, pugent crotch sweat!

The best Sun's picture

I say Ha!

32 days of building bunkers,

cocertina wire fences and conducting 30km foot patrols

in the balmy North of Western Australia,

whilst eating only ration packs and having NOT A SINGLE SHOWER.

My unit could recognise each other in total darkness by our individual stenches.

Yes, I know its repulsive! I can still remember what Cpl Cameron smelled like!

Off cheese and road killed buffalo.

Automatic Choke's picture

backpacking never seems to get that bad --  i do it mostly in dry climates.

worst i remember is a six day trip with a couple of friends, paddling kayaks from Key Largo to Key West, sleeping in the mangroves, etc.  confined wet mildewey spaces, sweat, salt water, did NOT look forward to opening that spray skirt.  if all three of us pulled up to a beach and disembarked at once, the mangroves would sag and drop dead leaves for a 50 foot radius.


Kirk2NCC1701's picture

Anarobes? Gasp!

Is that Anna Robes?

ebworthen's picture

Hey Girls, I got some Vodka and Marlboro's! can't have my chip code!

seataka's picture

yes..   best margins are when you cant see them

CC Lemon's picture

You can just send your dealer or your honey a paypal. All you need is their email address. Nobody cares what it's for.

(Except at the end of the year, your dealer and honey will have to file taxes on their earnings)

tmosley's picture

Yeah, they won't want to do that, and whores are well known to be terrible with money, and would all wind up in prison for not paying their taxes.

No, they will take PMs or crypto.

tmosley's picture

They will start taking gold, silver, and/or crypto.

Dash seems the most likely for the latter case, given its anonymity.

1uckypony's picture

hookers in china do accept "wechat wallet", do they not accept paypal in US?

Yen Cross's picture

  I was at the Credit Union a couple of days ago, with a family member. There were 2 tellers working and I mentioned how the ECB had just stopped printing € 500.00 notes.

 Then I said everyone was moving into ƒ 1000.00 notes in order to protect their wealth. They both looked at me like I had a hole in my head, and had NO idea I was just serving them pink slips.


El Dorado's picture

In High School I worked as a Bank Teller and I can assure you the vast majority of tellers and personal bankers don't really know that much about the banking industry or our modern day financial system.  They're just faces for the bank.  I've even met a teller that wasn't familiar with the Federal Reserve.... let that one sink in, granted she was young and also didn't know what an EFT was when I asked to set one up on a reacuring bases with another bank of mine.  And I am speeking of an American teller, just to clarify in the event YenCross is located in Switzerland or the greater European continent.

Yen Cross's picture

  This transacted in Amerika.

espirit's picture


If you would just move 150 miles North, you'd be a genius in this land.

A Pimp's love is different's picture

It's not all that odd. I mean, I doubt many McDonalds workers know about pink slime or Monsanto either.


Hell, my sister in law is a VP for a bank and had never heard of QE.