Cashless Society Case

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Information technology

PM102

Abed Jakfar

25687

10/04/2014

Executive Summary

This report was commissioned to provide an analysis and evaluation of the current prospective on the possibility of a cashless society. Attention to the possibility of a cashless society has increased and intensified over the few years. Some optimists look at the prospects and believe that a cashless society would expand the economy. The enthusiasm of this prospect has immediate and profound benefits to society. This report first outlines the advantages of cash in society and moves on to describe the disadvantages of a cashless society. This report includes an conclusion and recommendations about a cashless society.

Table of Contents

Executive Summary.........................................................................................................................1

Introduction......................................................................................................................................3

Background......................................................................................................................................3

Analysis of the Benefits of a cashless society……………….........................................................4

Analysis of the Drawbacks of a Cashless society............................................................................5

Conclusion.......................................................................................................................................6

Recomendations...............................................................................................................................6

References…………………………………………………………………………………………7

Bibliography………………………………………………………………………………………7

Introduction

This report first outlines the advantages of cash in society such as cash based complications, removal of counterfeit notes, the use of the  ‘contactless’ card, the advancing mobile applications and mobile use for payments and Bitcoin. This report next moves on to the disadvantages of a cash in society which include privacy concerns from individuals targeted by governments, the rise of Identification Theft, losing a Credit/Debit card and the increased power of banks around the world.

Background

The use of a cashless system in banks was first introduced in the 1920s; presented in the form of a cheque. This method became popular for handling large transactions amongst companies, as this method proved to work as a cure for the insecurities involving money transfers and reduced the chances of theft. Hence, the reason why a reduction in the use of hard cash is effective and increases the security of cash transfers.

Benefits of a cashless society

Cash payments can be easily concealed, therefore the amount and source of money can be hard to identify and tracked as there are no trails or statements left for identification, unless it has been recorded manually. With a cashless society every transaction will be recorded and archived, so that large organized crimes and groups accountable can be identified quicker. A change from cash to recorded transactions might allow for previous undeclared income to be exposed, ensuring that the consumer rightfully pays their income tax towards the money. It is therefore evident that it provides a high chance of the reduction of income tax as well as the national deficit.

Cash is very expensive to produce and can be a burden on the taxpayer and criminals can still produce counterfeit notes. According to the Bank of England an estimated 566,000 counterfeit notes are in circulation in the UK. “'An enormous amount of crime is about getting hold of cash, an enormous amount of expenditure on security is about protecting cash.' John Kay Economist” Michelle Martin. (01/03/2011) This clearly proves that the cash transaction system is not effective and reliable.

Insecurity in terms of safeguarding and transporting cash will be significantly reduced which will reduce security expenses for businesses and reduce crime. There will be no real need for armored trucks to carry cash from different organizations to banks that then have to tally the money.