Cashless society

Overview

In a cashless society, financial transactions are not conducted with physical banknotes or coins, but instead with digital information (usually an electronic representation of money). Cashless societies have existed from the time when human society came into existence, based on barter and other methods of exchange, and cashless transactions have also become possible in modern times using credit cards, debit cards, mobile payments, and digital currencies such as bitcoin. Such a concept has been discussed widely, particularly because the world is experiencing a rapid and increasing use of digital methods of recording, managing, and exchanging money in commerce, investment and daily life in many parts of the world, and transactions which would historically have been undertaken with cash are often now undertaken electronically. Some countries now set limits on transactions and transaction values for which non-electronic payment may be legally used.

History

Early ideas of a cashless economy were expressed by Edward Bellamy in his novel Looking Backward. The trend towards the use of non-cash transactions and settlement in daily life began during the 1990s when electronic banking became common. By the 2010s, digital payment methods were widespread in many countries, with examples including intermediaries such as PayPal, digital wallet systems such as Apple Pay, contactless and NFC payments by electronic card or smartphone, and electronic bills and banking, all in widespread use. At this point cash had become actively disfavored in some kinds of transaction which would historically have been very ordinary to pay with physical tender, and larger cash amounts were in some situations treated with suspicion, due to its versatility and ease of use in money laundering and financing of terrorism. Additionally, payment with a large amount of cash has been actively prohibited by some suppliers and retailers, to the point of coining the expression of a "war on cash". The 2016 United States User Consumer Survey Study claims that 75% of respondents preferred a credit or debit card as their payment method while only 11% of respondents preferred cash. Since the founding of both companies in 2009, digital payments can now be made by methods such as Venmo and Square. Venmo allows individuals to make direct payments to other individuals without having cash accessible. Square is an innovation that allows primarily small businesses to receive payments from their clients. By 2016, only about 2% of the value transacted in Sweden was by cash, and only about 20% of retail transactions were in cash. Fewer than half of bank branches in the country conducted cash transactions. The move away from cash is attributed to banks convincing employers to use direct deposit in the 1960s, banks charging for checks starting in the 1990s, banks launching the convenient Swish smartphone-to-phone payment system in 2012, and the launch of iZettle for small merchants to accept credit cards in 2011.

Research

Among the first sociological studies about cashless societies, see Aldo Haesler, Sociologie de l'argent et postmodernité, Geneva & Paris 1995.

Share of payments

A common measure of how close to a "cashless society" a country is becoming is some measure of the number of cashless payments or person to person transactions that are completed in that country. For instance, the Nordic countries conduct more cashless transactions than most other Europeans. Levels of cash in circulation can widely differ between two countries with a similar measure of cashless transactions.

Across the 33 countries covered in the European Payment Cards Yearbook 2015–16, the average number of card payments per capita per year is 88.4. In comparison, the average Dane makes 268.6 card payments each year, the average Finn 243.6, the average Icelander 375.5, the average Norwegian 353.7, and the average Swede 270.2. This makes card payments in the Nordics two-and-a-half to four times higher than the European average.

Amount of cash in circulation

Even though a cashless society is widely discussed, most countries are increasing their currency supply. Exceptions are South Africa whose supply of banknotes fluctuates wildly compared to most nations, and Sweden which has significantly reduced its currency supply since 2007. China's currency has decreased from 2017 to 2018

Amount of cash in circulation (historical)

The amount of cash in circulation was much lower in past decades in all countries except Sweden. The oldest comparative figures at Bank for International Settlements were from 1978 and only including the USD and 10 other currencies.

Denmark

All shops are required by law to accept coins and banknotes as legal tender. Particularly since the 2020s and COVID-19 pandemic, organizations have advocated for making the acceptance of cash as payment voluntary.

United Kingdom

A number of businesses in the United Kingdom may be forced to accept coins and banknotes as a number of MPs noted in April 2025 that these steps may be necessary to prevent vulnerable groups, such as people with learning disabilities, domestic abuse victims and the elderly, from becoming excluded from community spaces such as leisure centres, theatres and public transport.

United States

A few states and cities in the United States require the ability to pay with cash for certain transactions. In Massachusetts, there is a law passed in 1978 which says that no businesses in the state of Massachusetts can "discriminate against a cash buyer by requiring the use of credit". It was the only U.S. state to have such a law until March 2019, when New Jersey passed similar legislation; car rentals, parking garages, and airport stores have exceptions under the legislation. The bill came shortly after the city of Philadelphia passed a similar law. San Francisco has also banned cashless stores. Rhode Island became the third U.S. state to outlaw cashless businesses when its ban took effect on 1 July 2019 along with Colorado which also has a law that banned cashless shops since 2021. A requirement in New York City that businesses accept cash took effect on 19 November 2020. Similar laws exists in Washington D.C. (December 2020), Seattle (June 2023), and Detroit (September 2024). New York enacted a law in November 2025, effective in March 2026, whereby cash must be accepted as a payment option at "food stores and retail establishments".

Reduced business risks and costs

Cashless payments eliminate several risks, including counterfeit money (though stolen cards are still a risk), theft of cash by employees, miscounting of change, and burglary or robbery of cash. The costs of physical security, physically processing cash (withdrawing from the bank, transporting, counting) are also reduced once a business goes completely cashless, as is the risk that the business will not have enough cash on hand to make the change. Cashless payments are also known to be more efficient and safer compared to cash payments, and they can always be traced back afterwards as well.

Transaction speed

Restaurant chain Sweetgreen found cashless locations (with customers using payment cards or the chain's mobile app) could process transactions 15% faster.

Elimination of high-denomination notes for purposes of reducing criminal activity

One significant societal advantage cited by proponents is the difficulty of money laundering, tax evasion, performing illegal transactions, and funding illegal activity in a cashless society. Many countries have regulated, restricted, or banned private digital currencies such as Bitcoin, partly to prevent illegal transactions. Large amounts of value can also be stored in real estate, antiques, or commodities like diamonds, gold, silver, and platinum. Some have proposed a "reduced cash" system, where small bills and coins are available for anonymous, everyday transactions, but high-denomination notes are eliminated. This would make the amount of cash needed to move large amounts of value physically awkward and easier to detect. Large notes are also the most valuable to counterfeit. The United Kingdom declared only banknotes of £5 or less were legal tender near the end of World War II on 16 April 1945 due to fear of Nazi counterfeiting, although a £5 note then had a purchasing power equivalent to £187 in 2025, over five times larger than the current largest note of £50. On 14 July 1969, the federal government of the United States declared that banknotes of over $100 in value would remain legal tender, but any notes in government hands would be destroyed and that no new notes of those denominations would be printed in the future, although such notes were last printed in 1945, 24 years earlier. Canada did the same thing with the CAD$1000 banknote beginning on 12 May 2000. Sweden printed 10,000kr banknotes in 1939 and 1958, but declared them invalid after 31 December 1991. Singapore announced on 2 July 2014, that they would no longer produce the SGD$10,000 banknote, and it was no longer issued as of 1 October 2014. The European Central Bank no longer issues the €500 denomination euro banknotes as of 27 April 2019.