summary
This article explores how cash payments are changing in modern society. With the rapid development of electronic payments, global and domestic cash payments have gradually decreased, but in recent years some people have returned to using cash. The reasons why people reduce the use of cash are analyzed, including convenience, safety, hygiene issues and changes in the way wages are paid by the unit. The positive impacts of cashless payments, such as efficient payment and risk reduction, as well as the negative impacts, such as inconvenience to specific groups of people and the risk of fraud, are explained. At the same time, the phenomenon and reasons for the return of cash payment are discussed, including reliability and security, convenience and tolerance, financial management and privacy protection, and increasing happiness. Finally, it summarizes the changes in cash payment and looks forward to the future diversified development trend of harmonious coexistence of cash payment and non-cash payment.
keywords
Cash payment; electronic payment; changes in payment methods
1. Introduction
(1) Research background and significance
In today's society, electronic payment has rapidly emerged due to its convenience and efficiency, and has become one of the main payment methods in people's daily lives. However, as a traditional means of payment, cash payment’s status and role in modern society cannot be ignored. With the popularity of electronic payments, the proportion of cash payments in transactions has gradually declined, but this does not mean that cash payments have lost their value. On the contrary, cash payments still have great significance and influence in modern society.
Changes in cash payments have had profound economic, social and personal impacts. From an economic perspective, the reduction in cash payments may affect the velocity of money circulation and the effectiveness of monetary policy. At the same time, the development of electronic payment has also brought new financial risks and challenges, such as network security issues, information leakage, etc. From a social perspective, changes in cash payments may affect social equity and the rights of disadvantaged groups. For example, some elderly people and low-income people may not be familiar with electronic payment methods, and the reduction of cash payments may bring inconvenience to their lives. From an individual level, the choice of cash payment and electronic payment will also affect individual consumption behavior and financial management.
Therefore, studying the changes in cash payments in modern society has important practical significance. An in-depth understanding of the current status and development trends of cash payments can provide a reference for the government in formulating monetary and financial regulatory policies, and can also provide a basis for decision-making for businesses and individuals when choosing payment methods. At the same time, studying changes in cash payments can also help us better understand the economic, social and cultural changes in modern society.
2. The Current Situation of Reduction in Cash Payments
(1) Global trends
With the rapid development of electronic payments, cash usage in countries around the world has shown a sharp decline trend.
1. Australian situation
Reserve Bank of Australia governor Michelle Bullock revealed that up to 75% of Australians are now considered "low cash users". Only 13% of transactions currently use cash, down from 70% in 2007. Declining cash usage has put pressure on cash distribution systems and led banks to close hundreds of branches and ATMs each year. Australia's only cash-in-transit company also said there were problems with its business model and consumers could be charged for using banknotes to pay for goods and services. The Australian Competition and Consumer Commission this year approved the merger of Australia's two largest cash delivery service providers, Linfox Armaguard and Prosegur, but the new cash delivery service company, Linfox Armaguard, said its CIT business was still unsustainable. Commonwealth Bank and ANZ Bank now have cashless branches in the city, where tellers direct customers to ATMs rather than handling withdrawals over the counter.
2. Situation in Nordic countries
Taking Sweden as an example, from 2011 to 2020, the cash usage rate of Swedish people has dropped from 39% to 9%. The Danish Chamber of Commerce recently submitted a proposal to the government, recommending that relevant retailers be selected as soon as possible to accelerate the promotion of cashless payments. The proposal would allow retailers to reject cash payments and only accept mobile and card payments. Currently, in Denmark, 75% of transactions are completed through bank cards and other methods; in Sweden, nearly 80% of transactions are completed through bank cards and mobile payments; in Finland, 73% of customers choose to pay with cards when paying in restaurants, and 66% of consumers in cafes and bars use bank cards to pay.
Norwegians only use banknotes or coins in 3% to 4% of transactions, making them just one step away from becoming a "cashless society." However, since the outbreak of the new crown epidemic, Norway’s consumer protection agency has been receiving complaints about being unable to pay bus fares or buy coffee with cash, and the country’s retirees association has expressed dissatisfaction and concern about this trend.
However, concerns about Russian security threats have prompted Sweden and Norway to reconsider plans for a cashless society. The Swedish government advises people to use cash regularly and keep as much cash as they need for at least a week in various denominations, and is also considering legislation to protect the ability to pay for certain goods with cash. The Norwegian government passed legislation stipulating that from October 1, retailers who do not accept cash will be subject to fines or sanctions.
3. Canadian situation
Canada is a country with a high credit card penetration rate. Visa Credit Card Company said that Canadians are "ready to stop using cash" because the country has "one of the highest credit card payment penetration rates in the world (70%)." Credit cards, debit cards and prepaid cards together accounted for 60% of all transactions nationwide in 2021, with electronic payments accounting for 12%.
(2) Domestic current situation
With the rapid development of electronic payments, domestic cash payments are also gradually decreasing. This change not only affects people's daily lives, but also has a profound impact on the economy and society.
1. Impact of new bank regulations
In recent years, banks have introduced a series of new regulations that restrict some withdrawals. This move has had different impacts on different groups.
2. Development of cashless payment
Cashless payments are becoming more and more popular in the country. Currently, the number of mobile payment users has exceeded billions, and the market size is also expanding. Cashless payment has covered all aspects of people's lives, including shopping, dining, transportation, tourism, etc.
3. Reasons why people use cash less
(1) Convenience factor
Compared with cash payment and mobile payment, there is a big gap in convenience. Mobile payment has the characteristics of no need to carry cash and easy change, making it the first choice for more and more people.
1. Avoid the hassle of carrying cash
Before mobile payments became popular, people needed to carry wallets filled with cash and various cards, which not only took up space but were also easily lost or stolen. Now, you only need a mobile phone to complete various payment operations without worrying about cash being stolen or lost. For example, when people go shopping or traveling, they no longer need to pay attention to the safety of their wallets or worry about running out of cash. This convenience makes people more inclined to choose mobile payments and reduces the use of cash.
2. No change required
The consumption amount of mobile payment can be transferred directly by scanning the QR code without waiting for the store owner to give change, which greatly improves the transaction efficiency. In traditional cash payments, it often takes a certain amount of time to make change, especially when the transaction amount is large or there are many coins that need to be changed. Mobile payment can be accurate to the minute, avoiding the trouble of finding change. For example, when shopping in a supermarket, using mobile payment can quickly complete the settlement without waiting for the cashier to give change, saving time and improving the shopping experience. In addition, for merchants, it also reduces the cost and risk of cash management and improves operating efficiency.
(2) Safety considerations
Analyze the differences in security between cash payments and electronic payments.
1. Electronic payments are safer
Even if the mobile phone is lost or stolen, mobile payment can transfer funds in time and reduce the risk of loss. Nowadays, electronic payment platforms usually have multiple security measures, such as passwords, fingerprint recognition, facial recognition, etc. Once the mobile phone is lost or stolen, users can quickly log in to the payment account through other devices and transfer funds to a safe place, thereby effectively reducing the risk of loss. In addition, electronic payment platforms will continue to upgrade security technologies to deal with various potential security threats.
2. Cash is easy to steal
Carrying cash with you carries the risk of being stolen, and the security is relatively low. Carrying a large amount of cash with you is not only an easy target for thieves, but also once stolen, it is difficult to recover the loss. Compared with electronic payments, cash does not have any password or authentication mechanism, and once lost, it means completely losing the money. For example, in crowded places, such as shopping malls, stations, etc., people carrying cash are more likely to become targets of thieves. Electronic payment can effectively prevent the theft of funds through various security technologies.
(3) Health issues
There are obvious differences between cash and electronic payments in terms of hygiene.
1. Cash can easily carry bacteria
As a physical currency, cash will come into contact with many people during the circulation process, and its surface is easily contaminated with various bacteria and viruses. Money, as one of the items that are frequently touched in daily life, may be contaminated with pathogens such as bacteria and viruses. The World Health Organization has warned that money changes hands frequently, carrying all kinds of bacteria, viruses and whatnot. For example, in 2020, the People's Bank of China commissioned a national authority to conduct sampling tests on cash in circulation, and the results showed that there were a small number of bacteria on the cash. The more cash is circulated, used and stored in different scenarios, businesses and individuals, the dirtier it becomes and poses certain health risks.
2. Electronic payment is more hygienic
In contrast, electronic payments are made over the Internet without touching physical currency, thus avoiding the risk of cross-infection caused by touching currency. During the period of major infectious disease prevention and control, WHO recommends that people use contactless payment methods to prevent the spread of the virus. For example, although the Bank of England acknowledges that banknotes may carry bacteria or viruses, the risk of contact with polymer banknotes is no greater than contact with any other ordinary surface, such as handrails, door handles or credit cards. There is no need to worry about these problems with electronic payment. From this perspective, online payment is more hygienic and safer.
(4) Other reasons
For example, changes in the way units pay wages encourage people to reduce the use of cash.
1. Changes in salary payment methods
Nowadays, many government agencies, enterprises and institutions no longer pay wages in cash, but through bank transfers. This change in salary payment method is more trouble-free. For the unit, there is no need to count and distribute cash, which greatly improves work efficiency. At the same time, banks can also absorb deposits in this way and increase their capital reserves. In addition, paying wages by transfer can also reduce the error rate and avoid problems such as amount errors and counterfeit currency that may occur during the cash distribution process.
The trend of changing wage payment methods can also be seen from some news reports. For example, there are reports that some companies have adjusted their salary payment methods, dividing housing subsidies and service awards into monthly salaries, and paying them through bank transfers. This approach enhances employees’ monthly cash flow and ensures stable income for relevant employees.
In short, the shift to bank transfer in the way units pay wages has, to a certain extent, prompted people to reduce their use of cash.
4. The impact of cashless payment
(1) Positive impact
1. Efficient payment methods
Electronic payments, such as credit cards and mobile app payments, are indeed more efficient payment methods and play an important role in modern society. On the one hand, electronic payments greatly save transaction time. In the past, when paying with cash, consumers needed to spend time preparing cash and waiting for change, while merchants also needed to perform cash counting and other operations. The entire transaction process was relatively cumbersome and time-consuming. In contrast, electronic payment only requires consumers to complete the payment in a few seconds by scanning a code with their mobile phone or swiping a credit card, which greatly improves transaction efficiency. For example, during peak shopping periods in supermarkets, customers who use electronic payment can quickly complete settlement, reduce waiting time in queues, and improve the shopping experience. On the other hand, electronic payment also brings convenience to merchants and financial institutions. Merchants do not need to worry about cash management issues, such as cash storage, change errors, etc., and at the same time, they can receive payments faster and improve capital turnover efficiency. Financial institutions can monitor transactions in real time through the electronic payment system and provide users with more accurate financial services.
2. Reduce risk
Reducing the use of cash does reduce the risk of being robbed while carrying large amounts of cash, and improves personal financial security. In the era of cash payment, people carry large amounts of cash when going out, which poses great security risks and makes them easy targets for thieves. Once cash is stolen, not only will it cause economic losses, but it will also be very difficult to recover. Electronic payment avoids this risk. Users only need to carry electronic payment tools such as mobile phones or bank cards. Even if these items are lost or stolen, they can protect the safety of their funds by promptly reporting the loss or changing passwords. For example, with mobile payment, even if the mobile phone is lost or stolen, users can transfer funds in time to reduce the risk of loss. Nowadays, electronic payment platforms usually have multiple security measures, such as passwords, fingerprint recognition, facial recognition, etc. Once the mobile phone is lost or stolen, users can quickly log in to the payment account through other devices and transfer funds to a safe place, thereby effectively reducing the risk of loss. In addition, electronic payment platforms will continue to upgrade security technologies to deal with various potential security threats. At the same time, reducing the use of cash can also help reduce the company's cash management risks. When companies conduct cash transactions, they need to carry out cash counting, storage and transportation. These links have certain risks, such as cash loss, theft, counterfeit currency and other issues. Electronic payment can avoid these risks and improve the financial management efficiency of enterprises.
(2) Negative impact
1. Inconvenience to certain groups of people
It causes inconvenience to people who do not have bank accounts or cannot use electronic payments, such as the elderly and vulnerable groups. The elderly are often unfamiliar with the operation of electronic devices and find it difficult to adapt to electronic payment methods. They may not know how to pay using their smartphones, or they may have concerns about the security of electronic payments. Vulnerable groups, such as people with disabilities, may not be able to use electronic payments conveniently due to physical limitations. For example, visually impaired people may have difficulty seeing the payment information on the mobile phone screen, and physically disabled people may not be able to flexibly operate the mobile phone to make payments. These people rely more on cash payments, and the reduction in cash payments has brought a lot of inconvenience to their lives.
2. Fraud risk
Electronic payments may face security threats such as online fraud and credit card fraud. There are endless online fraud methods, such as phishing websites, fake customer service, etc. Criminals send false links to induce users to enter personal information and payment passwords, thereby stealing funds. Credit card fraud is also a common problem, and criminals may steal credit card information to conduct illegal transactions. For example, some criminals use fake base stations to pretend to be bank customer service and send text message links asking users to download the client. In fact, the link is a phishing website, and the downloaded client is a Trojan horse virus that will steal the user's card information. In addition, there are also credit risks in online payments. If an electronic currency issuer invests the funds obtained from selling electronic currency, and the investee fails to perform its business, it may bring credit risks to the issuer. The imperfect social credit guarantee system is the fundamental reason for the existence of credit risks and is also an important factor restricting the development of online payment businesses.
5. The return of cash payment
(1) Cases of some people returning to using cash
1. Young people’s choice
Today, some young people such as Xiaoxu and Dundun are returning to paying in cash under certain circumstances. After experiencing a period of financial constraints, Xiaoxu found that using cash allowed him to know his spending situation more clearly, thereby changing his consumption habits. She spent thousands of dollars within a week of receiving her salary, and on days when she used cash, she could save a few dollars in change by circulating a hundred-dollar bill. In order to save money for the renovation of a new house, Dundun converted daily household expenses into cash payments. She takes her coin purse with her when she goes out every day, and the total is less than a hundred. After using cash, she will seriously consider whether it is an urgent need when shopping, and basically does not order takeout or stock up on goods. There are also some young people like Li Zi who followed bloggers to experience "virtual dog raising" in order to save money. They saved the expenses of raising a dog in a separate account and saved more than 2,000 yuan in more than 2 months. But she also realized that in reality the cost of raising a dog was much more than that, so she gave up the idea of raising a real dog. In addition, in the past year, some young people have returned to using cash on social platforms, many of whom are mothers. In the era of digital consumption, they find an inconvenient way to spend money to save a sum of money for their families to cope with risks. For example, after experiencing a decline in business and illness in family members, Orange established a group "Looking for money-saving partners in 2024" and tried cash saving methods, such as saving a sum of money every month, every ten days, every week, and every day, and strictly using cash on the remaining days. They also started to save money by keeping accounts, selling luxury bags, and setting up stalls selling stir-fried beef sauce. Li Meng complained in the group that his children were "gold-eating beasts". After joining the group, he tried various ways to save money and successfully reduced his monthly consumption from more than 2,000 to less than 1,000.
2. Habits of the elderly
Some elderly people prefer to use cash. They believe that cash payment can clearly know their daily expenses and is more convenient. The elderly are often unfamiliar with the operation of electronic devices and find it difficult to adapt to electronic payment methods. For example, some elderly people do not know how to use smartphones and go to the bank every month to withdraw cash for shopping. They are not proficient in the operation steps of electronic payment and are unwilling to re-learn. They think that shopping with cash can help them know their balance and prevent them from spending in advance. Moreover, there is no risk of information leakage in cash payment, which is more attractive to the elderly who pay attention to privacy and security. In addition, cash payments do not need to worry about network failures. Even if there is no network, the elderly can still consume normally.
(2) Reasons for returning to cash
1. Reliability and security
Cash can be used as a backup means of payment in emergencies, such as natural disasters, mobile phone malfunctions, etc. For example, when natural disasters such as floods and earthquakes occurred in some places last year, power and Internet outages occurred. If the family prepared cash, they could go to nearby stores to buy daily necessities to cope with the disaster. In addition, if someone in the family suddenly becomes ill at night and is sent to the hospital for rescue, a rescue fee must be paid in advance. If the family has cash, they can pay it immediately, allowing the patient to receive treatment faster. Moreover, when traveling, cash can also play an important role in special situations such as no network environment, no battery on the mobile client, or equipment failure. At the same time, suggestions from bank insiders also mentioned the necessity of keeping some cash at home and bringing some cash when traveling to cope with various emergencies.
2. Convenience and tolerance
In some scenarios that do not support mobile payment, such as farmers' markets, roadside stalls, etc., cash is more practical and more inclusive to vulnerable groups. Many roadside vendors sell home-grown vegetables. They don’t know how to use mobile phones and can only pay in cash. For the elderly, they are not familiar with the operation of electronic devices and have difficulty adapting to electronic payment methods. It is more in line with their habits to go to the bank every month to withdraw cash for shopping. The elderly do not know how to use smartphones, are not proficient in the operation steps of electronic payment, and are not willing to re-learn. They think that shopping with cash can help them know their balance and avoid spending in advance. Moreover, cash payment does not have the risk of information leakage, making it more attractive to the elderly who value privacy and security. In addition, cash payments do not need to worry about network failures. Even if there is no network, the elderly can still consume normally.
3. Financial management and privacy protection
Cash payment gives people a more intuitive understanding of consumption and helps control consumption; at the same time, it can better protect personal privacy. Paying with cash can bring about stronger "spending pain". When paying with cash, this physical transaction method will make consumers feel the reduction of money more intuitively. Compared with card swiping or mobile payment, the visual characteristics of cash payment are more likely to trigger people's psychological vigilance about spending, which may prompt them to be more cautious and restrained in consumption. Since cash has physical limitations, when there is limited cash in the wallet, a preset budget constraint is naturally formed. When you see less and less money, it will be easier to follow your own budget goals and avoid unconscious overspending. Cash payment allows the "execution me" to immediately feel the impact of consumption decisions, helping individuals better synchronize the long-term planning of the "plan me" with the actual actions of the "execution me" and avoid the risk of excessive borrowing. At the same time, using cash to pay can ensure the security of personal privacy. As long as cash is used to pay, consumers’ personal privacy will not be easily leaked.
4. Increase happiness
On specific occasions, such as weddings, giving red envelopes, etc., cash can make people feel more valued and happy. In some traditional customs, such as weddings, New Year red envelopes and other occasions, cash can better reflect the sense of ritual and attention, making people feel happy. In addition, on some social platforms, many people found that after returning to cash payments, they found that they could better control consumption and save a sum of money for their families to cope with risks. This sense of accomplishment also increased their happiness. For example, in the era of digital consumption, some mothers find inconvenient ways to spend money, such as the cash deposit method, to save a sum of money for their families. They also start to keep accounts, sell luxury bags, set up stalls to sell stir-fried beef sauce, etc. The process of this kind of efforts to bring a sense of security to the family also makes people feel happy.
6. Conclusion
(1) Summarize the changes in cash payment
Cash payment has experienced a process of gradual reduction and re-use by some people in modern society. With the rapid development of electronic payment, cash usage in countries around the world, including my country, has shown a downward trend. However, in recent years, some people have begun to use cash again. There are many reasons and influences behind this phenomenon.
From the perspective of declining cash payments, the global trend is clear. In Australia, cash usage has plummeted, with bank branches and ATMs closing and cash transport companies struggling. In Nordic countries such as Sweden, Denmark, and Norway, the cash usage rate has also been decreasing year by year. However, due to concerns about security threats, Sweden and Norway have reconsidered their cashless society plans. In Canada, credit card penetration is high and the proportion of electronic payments is also increasing. In our country, with the development of electronic payments, banks have introduced new regulations to restrict some withdrawals, cashless payments have rapidly become popular, there are a large number of mobile payment users, the market scale continues to expand, and it covers a wide range of consumption scenarios.
The main reasons why people reduce the use of cash include convenience factors, security considerations, hygiene issues and other reasons. Mobile payment does not require carrying cash and is easy to make change, making it more convenient; electronic payment platforms have multiple security measures, which are safer than cash, but there is a risk of being stolen when carrying cash out; cash can easily carry bacteria in circulation, and electronic payment is more hygienic; in addition, changes in the way units pay wages also encourage people to reduce the use of cash.
Cashless payment has brought positive impacts, such as efficient payment methods, saving transaction time, bringing convenience to merchants and financial institutions; reducing risks, reducing the risk of cash being stolen, and improving the financial security of individuals and businesses. However, there are also negative impacts, causing inconvenience to people who do not have bank accounts or cannot use electronic payments, such as the elderly and vulnerable groups. At the same time, electronic payments may face security threats such as online fraud and credit card fraud.
However, cash payments are also making a comeback. Some young people are returning to using cash for purposes such as controlling consumption and saving money, while older people are more inclined to use cash due to habits and unfamiliarity with electronic devices. The reasons for reusing cash include reliability and safety. Cash can be used as a backup payment method in emergencies; convenience and tolerance. Cash is more practical in some scenarios that do not support mobile payment and is more tolerant to vulnerable groups; financial management and privacy protection. Cash payment gives people a more intuitive understanding of consumption, which is conducive to controlling consumption and can better protect personal privacy; and increases happiness. Cash can make people feel more valued and happy on certain occasions.
The changes in cash payments reflect the development and changes of social economy and technology. In an era when electronic payments are prevalent, cash payments still have their value. The central bank also emphasized that cash payments should not be excluded or discriminated against, and should coexist harmoniously with non-cash payments. The organic coexistence of cash and non-cash payments can make the total transaction costs of society lower. In the future, cash payment and non-cash payment will continue to coexist to meet the needs of different groups of people and provide more diversified payment methods for social and economic development.
(2) Outlook on future payment methods
In the future, cash payment and non-cash payment methods will show a trend of diversified development, and the two are expected to achieve harmonious symbiosis.
As a traditional payment method, cash payment will still have its value and significance in the future. It can be seen from the central bank's announcements and research that cash is the most basic means of payment in my country and is legally compensable. At the same time, cash can be used as a backup means of payment in emergencies, such as natural disasters, mobile phone failures, etc. In addition, cash payment is more friendly to some specific groups, such as the elderly and vulnerable groups, who may rely more on cash payment due to unfamiliarity with electronic devices or operating difficulties. In some scenarios that do not support mobile payment, such as farmers' markets, roadside stalls, etc., cash is also more practical. Cash payment can also give consumers a more intuitive understanding of consumption, help control consumption, and better protect personal privacy.
Non-cash payment methods will continue to develop in the future due to their convenience and efficiency. With the continuous advancement of technology, new non-cash payment methods such as digital payment and smart payment will continue to emerge, providing people with a more convenient and secure payment experience. For example, the application of technologies such as mobile payment and facial recognition payment has made payments faster and more convenient, greatly improving transaction efficiency. At the same time, non-cash payment methods can also reduce transaction costs, improve capital turnover efficiency, and bring more convenience to merchants and financial institutions.
In order to realize the harmonious coexistence of cash payment and non-cash payment methods, all parties need to work together. The government should strengthen supervision of the payment market, standardize payment behavior, and protect the legitimate rights and interests of consumers. The central bank should continue to emphasize that cash payments must not be excluded or discriminated against, and encourage the harmonious development of payment methods. Financial institutions should continue to innovate payment products and services to improve the security and convenience of payments. At the same time, all sectors of society should also strengthen financial knowledge and skills training for special groups such as the elderly and vulnerable groups to help them better adapt to payment methods in the digital age.
In short, in the future, cash payment and non-cash payment methods will complement each other in competition and jointly provide more diversified payment options for social and economic development.
