Going Cashless

It’s not far-fetched to imagine first-world countries adopting the methodology of going totally cashless. The drive for cashless payment – led by government’s initiative – is going full steam ahead. Why bother dispensing with cash when cashless is much better. It is trackable, eliminates human error, fast and convenient.

I’ve heard that in China, the adoption rate for cashless payment is so high that some people just do without their cash altogether. It’s so common to pay using an app or e-wallet because the acceptance rate is so high among merchants.

As with anything that brings convenient, what once requires thought and consideration gets cast away. Take for example, an in-app purchase. Once we’ve linked our credit or debit card to the account, purchase any app or in-app stuffs is just a click away. And when you’re so hooked and engrossed in the game, you don’t make rationale decision. You end up paying for something you might never have if you had to pay with cash.

Likewise, adding items into online marketplaces is super easy. In Amazon, you can turn on one-click purchase feature and with a single tap, the order is made and the items are on way to you. The allure is always there. Businesses are making the process seamless and easy. But who’s really benefiting here?

When we spend without using cash, it feels as though we are not spending any actual money. We don’t feel the pinch. We will only feel it when the card statement arrives. It’s only there when we scan through and realise how effortlessly we part with our hard-earned money. We promise ourselves to monitor our purchases more prudently and never succumb to temptations. Does it work? I’ve failed more often than not.

When the bills arrive, I sometimes struggle to recall what transactions they were, and for what purpose they serve. Considering that I liberally pay using multiple cards, they do get confusing. I’ve 5 credit cards, signed for various perks like points accumulation, discounts and rewards. It’s one too many and I’d like to trim it down. Not only will my statements be more manageable, it get rid of the clutter of redundant cards in my wallet. One good card from Visa, Mastercard and Amex will cover all occasion. Maybe 3 is also overkill, but at least I’m eliminating those that I rarely use. That’s for another topic – finance management – one that I really need to practice more deliberately on.

We can choose not to save a default credit card, having to re-enter the information each time we want to purchase. This added step serves as a (minor) deterrence for mindless spending.

Without paying with cash, it’s easy to lose sight of the expenses. A few apps here and there don’t seem like a lot, but they all add up. Cashless is an intangible way of transaction, unlike paying with cash, where you intentionally and consciously know that you are parting with your money. It’s easy for people to think they are not really spending that much when the reality is far from this assumption. It becomes frictionless to spend money we can’t see. That’s the danger we have to accept, especially for people like me, who often give it to impulses.

While going cashless brings about a world of convenience, it also opens up a path to a slippery slope.