Pros and Con of Cashless Economy fn 1

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1 Pros and Con of Cashless Economy Student's Name Institution Course Instructor Date
2 Pros and Con of Cashless Economy Although the adage "Cash is King" is widely known, it ignores the fact that cash sitting in a bank account earns no interest, thus putting that money to use online will result in profit. The term "cashless economy" refers to a system in which alternatives to cash are widely used for financial transactions. Credit cards, debit cards, electronic wallets, and other cashless or low- cash-flow payment systems qualify. An effective tool in the fight against the "grey" economy, terror financing, and corruption is a cashless economy. It's important to keep in mind that the shift from a cash-based to a cashless economy, enabled by digital methods, is a phenomenon that can be predicted to bring about a sea change in every country's economy. The progressive step of demonetization taken by governments around the world has led to the widespread adoption of the cashless economy. The primary motivation is to lessen the country's reliance on hard currency (Choudhary 2018). Yet, many economists have debated the pros and cons of a cashless economy. As a result, we will be discussing the merits and drawbacks of a cashless economy in depth. Pros of Cashless Economy Crime Rates Mitigation The lives of bank employees and company owners were frequently put in danger because of cash tills. The elimination of paper currency, however, has resulted in a notable increase in business owners' sense of safety. This means that store owners of all sizes do not need to worry about hiring security guards (Patidar, 2020). Recently, stores may require trained security guards to protect cash during transport to banks. Businesses and customers now have to consider how much they can save thanks to the shift toward a cashless economy. Worker Tax Evasion Prevention
3 Furthermore, cashless economies have mitigated tax evasion, one of the greatest dangers to a nation's fiscal health. People are more likely to avoid contributing to the government's coffers when they are paid in cash, rather than through the traditional channels. For instance, the government does not collect any taxes from construction sites that pay their employees in cash. Since most people's payments are now made online, with taxes automatically deducted, the prevalence of tax evasion has decreased thanks to the advent of the cashless economy. Improved Health Eliminating the need for physical currency has been a major step toward eliminating pathogen-related illnesses. Banknotes and coins are frequently handled by a wide variety of persons, increasing the likelihood that they may be contaminated with germs. When you remove the human element of handling paper money and coins, the risk of catching diseases like cholera and dysentery is greatly reduced. In the most recent pandemic, Covid -19, the destruction of paper currency and coinage protected consumers and merchants from the spread of the coronavirus. The coronavirus, it was hypothesized (Memdani 2020), may survive on currency for up to two days at most. Because of this, it could be risky for the health of people engaged to do business entirely in cash. Therefore, the prevalence of sickness in society has been considerably reduced because to the advent of digitalized transactions. Fast Transactions It is inconvenient to use cash to buy things when there are lengthy lines of people waiting to do so. The time wasted searching for change poses a risk in transactions when speed is essential, such as purchasing bus tickets. As a result, commute times will increase, and more people will be sitting in traffic. Many tourism businesses today choose not to accept cash and have instead shifted to accepting just electronic payments. When speed is of the essence, many
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